Mario Cordero spoke to FreightWaves last week from Hong Kong, where he was making the rounds with customers following the World Shipping Summit in Shanghai. He talked about record container volumes, tariffs and the status of billions of dollars in Port modernization projects.
On the Port’s heady FY 2018 volumes
“The record volumes commenced with 2017. Last year, we moved 7.5 million containers, a Long Beach record in our 110-year history. In the latest year, FY2018, we moved eight million containers, again a milestone. We’re looking forward to continued cargo movement, primarily due to the economy at both a domestic level and global. There is strong consumer demand. We’re very pleased.”
How tariffs drove volumes
“The 2017 number was without tariff or trade restrictions. The second half of 2018 — it’s fairly safe to say some of the cargo represents expedited action to beat tariffs.
“There was the initial tariff application, $34 billion on Chinese imports, then an additional $16 billion, for a total of $50 billion. The next application involves $200 billion in cargo at 10% tariff, and the Trump Administration has indicated they may look at 25%. The final stage would be the full tariff model on all Chinese imports. If that was to happen, there would be an impact.”
“Having said that, I want to make also the point, that the two countries, China and the U.S., will move toward a meeting of the minds. So there is optimism.”
On congestion caused by high volumes
“There have been no congestion issues. Absolutely not. This goes to preparation by this Port — our $4 billion capital improvement plan, to increase efficiency by upgrading terminals, waterways, bridges, rail and other infrastructure.”
“In terms of the $4 billion, we have the Middle Harbor project. We are in the last phase, phase three, of this state-of-the-art terminal. The Middle Harbor is a $1.3 billion endeavor.”
“The Gerald Desmond Bridge replacement bridge is a similar type of endeavor. It’s going to be an iconic bridge — I call it ‘the bridge to everywhere.’ Fifteen percent of imported cargo goes through that bridge. There is not one congressional district that does not receive a container going across that bridge.
“So here at the Port, we are moving cargo efficiently, faster and more reliable. This has been the plan of action.”
On new rail projects
“In addition to that $4 billion, the commission budgeted $1 billion to increase and further rail infrastructure, specifically on-dock rail.”
Our commission has set a goal to move half of the container movement by rail. That’s a long term goal. One of the key projects is the Pier B rail project. It expands the current capacity. Once that is completed, we will have capacity to move 36%-37% by rail. Currently we are around 26%.
On cargo tracking portals
“We completed a pilot project of the Port Optimizer with regard to our terminals. We’re looking forward as a Port to take advantage of technology to bring transparency, visibility to our Port. We will be making a decision regarding the portal platform. There are other entities that are looking at this.”
On future capacity
“We started in years past to be big ship ready — 13- and 14-thousand-TEU vessels. Because of this commitment to capital, we have four terminals here that can receive 14,000-TEUs and above; three can receive 18,000 and above; and of course, the Middle Harbor Terminal that will have the potential of receiving 24,000-TEU. It could be the sixth largest port in the nation, the Middle Harbor, all by itself. So we are not only a deep water port, but we are ready for the size of vessels today.”
