Port handled 9.5 million TEUs in 2018 and believes technology can help solve “persistent systemic problems.”
Gene Seroka, executive director of the Port of Los Angeles, says, “In addition to brick-and-mortar development, 2019 will be a year for continued focus on our ongoing digital transformation.”
Seroka made the remark last week during his annual State of the Port Address, in which he noted 2018 was another year for record flows of containerized cargo through the port. Containerized cargo accounts for roughly 75 percent of the port’s revenue and he said the port’s container terminals moved nearly 9.5 million TEUs in 2018, up 1.2 percent from 2017 and the third consecutive year of record volumes for the nation’s largest container terminal.
Seroka attributed the surge in cargo volumes to the strong economy, low unemployment, robust holiday sales, shippers moving cargo ahead of higher tariffs or threatened tariffs as well as the Port of Los Angeles’ own incentive programs for shippers.
Shippers have complained about chassis shortages and congestion at the Ports of Los Angeles and Long Beach, and Seroka said, “In the coming year, we will position ourselves to adopt new technologies to improve the reliability, predictability and efficiency of cargo flow through San Pedro Bay. We intend to leverage the industrial internet of things, big data and other emerging technologies. These technologies can redefine the way goods and services relate to the physical environment of our port complex.
“If we can responsibly harness their potential, these advanced solutions will reposition our port as a trusted partner in the digital space, just as we are in physical operations. We can begin to solve persistent systemic problems within the port complex, including truck queuing and chassis dislocations,” he said.
Seroka pointed to the port’s collaboration with General Electric in the creation of its Port Optimizer electronic portal for tracking cargo, which he said is now “live and available for stakeholders to register and start using.”
GE says the portal gives users advanced visibility of incoming cargo and will “lead to improved turn times while increasing throughput as well as more productive turns.”
Seroka said ocean carriers moving about 60 percent of the port’s cargo are providing the Port Optimizer with full data feeds and that in the next 30 days additional carriers will join the system so that 90 percent to 95 percent of the port’s containerized cargo can be tracked.
“No longer are we a passive landlord port. We are active members of the supply chain, seeking to create value through partnerships,” he added.
Seroka said the port has kept cargo moving “through ongoing supply chain optimization efforts; strong collaboration between our longshore workforce, terminals, rail providers, drayage operators; and a new PierPass 2.0.”
The PierPass 2.0 agreement among container terminal operators requires all shippers to have appointments for their truckers to pick up and deliver cargo. Instead of requiring shippers to pay a fee to pick up cargo during the day and waiving the fee at night, a reduced fee is being charged around the clock, with the expectation that this will make terminal operations more efficient and reduce truck congestion in the port.
A report by the Federal Maritime Commission on detention and demurrage charges released last month said giving “consistent notice to cargo interests of container availability” was one of its key recommendations.
Looking forward, Seroka said the Port of Los Angeles is seeing strong January volumes leading into the Lunar New Year holiday in Asia, which occurs on Feb. 5.
Many factories in China and other Asian countries shut down during the Lunar New Year holiday, and because of low cargo volumes, many carriers cancel voyages for a week or two. The forwarder Flexport has published a list of some of these so-called “blank sailings” on its blog.
In other lines of business, Seroka said in 2018:
• Vehicle shipments declined 34 percent percent in 2018 as overall vehicle sales in the U.S. rose by less than 0.5 percent.
• Liquid bulk shipments declined by 8.4 percent due to lower production by some of the port’s customers in 2018.
• Scrap metal volumes grew by nearly 26 percent, continuing a positive two-year trend.
• Steel slab imports were up slightly.
• Winter fruit shipments increased nearly 8 percent.
Also last week, the Los Angeles Board of Harbor Commissioners approved a settlement agreement between the City of Los Angeles and California Transload Services (CTS). Under the agreement, CTS will vacate a warehouse and 85-acre site at the port after 180 days.
CTS is a unit of California Cartage and its parent company, NFI, and has operated at the location since the 1950s, Seroka said.
NFI said earlier this month it would close the warehouse in July after the Los Angeles City Council vetoed a permit that would have allowed it to continue to operate at the site in the Wilmington section of Los Angeles.
NFI said it had been “left with no option but to close the warehouse in July 2019 as a result of the failure to renew the company’s lease agreement. That failure is a direct result of the strategy undertaken by the Teamsters to spread misinformation and untrue statements about Cal Cartage as part of its continued effort to organize Cal Cartage’s Wilmington employees, despite the employees overwhelmingly voting against unionization.”
The Teamsters had accused NFI of breaking labor laws.
Seroka said CTS will not pay rent on the property but will make payments to workers losing their jobs above statutory requirements. The amount of those payments are not to exceed $1.34 million.
“The harbor department is putting process before profits,” said Seroka.
An NFI spokeswoman said there are about 800 people whose employment is supported by the warehouse. They are a mix of employees, temporary laborers, independent contractors and vendors. The jobs range from warehouse workers to maintenance personnel to office staff and independent contract drivers. The number of temporary workers at the facility fluctuates based on the time of year, as the warehouse is busier during the holiday season, for example.
She added that “Cal Cartage will work with existing customers to move them to other company-operated facilities in the region.” Lowe’s, Amazon, TJ Maxx, Sears and Kmart are customers at the warehouse.
During his speech, Seroka noted the port last year completed an on-dock railyard as part of a $127 modernization project at Yusen Terminal. The port’s capital improvement program for the current fiscal year includes a two-year terminal improvement project at the Everport terminal so it can accommodate more calls from the newer, larger container vessels.
He said the port also will start design work on two important rail enhancement projects that will provide more capacity for APM Terminals’ Pier 400 on-dock railyard and the port’s West Basin area rail network.
Elon Musk’s SpaceX company has processed nearly a dozen rocket and capsule recoveries at the port, and Seroka said while that operation will continue, the company has canceled plans to build a heavy rocket at the port.
Seroka said the port is working to further reduce air pollution and greenhouse gas emissions and is actively involved in more than 15 zero and near-zero emission demonstration projects that leverage more than $80 million in grant funding.
As part of a California climate initiative grant announced in September, he said the port is collaborating with Toyota, Kenworth, Shell and the Port of Hueneme on an $82.5 million demonstration project.
“We’ll be testing 10 hydrogen fuel cell electric trucks for regional deliveries, as well as four zero-emissions cargo-handling tractors. The project also includes two new hydrogen fueling stations. “
Los Angeles highlights ‘digital transformation’
