by Stas Margaronis Jan 20, 2023
In spite of the loss of cargo to East and Gulf coast ports and the continued stalemate in dockworker contract negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), Port of Los Angeles Executive Director Gene Seroka is convinced his port will bounce back stating: “Don’t bet against LA.”
In an interview with AJOT before his ‘State of the Port of Los Angeles’ address on January 19th, produced by the Pacific Merchant Shipping Association (PMSA), Seroka said the ILWU and PMA have been working to reach an accord while avoiding a strike: “There’s still much work to do. Collective bargaining is really hard work, but I credit both sides. They’ve been at the table consistently and they’ve sent out two media releases jointly signed saying they would not strike, and they would not lock out. …They met with the President, the first sitting President to meet with both sides during an active negotiation.”
Even so, Seroka admits “that’s still not been enough to convince people to keep their cargo here.”
As a result, Seroka has been “crisscrossing the country” assuring shippers but admits the “the people who make the decisions on cargo want this contract signed. We must get that done …, we will continue to go after every pound of freight we can: Don’t bet against LA.”
To help rekindle confidence, Seroka says “We’ve got to raise the bar on service to give that level of certainty back to the market, so they know that the best gateway to come from Asia to the interior of the U.S. continues to be through LA.”
LA and Automation
Seroka admitted that a major issue in the current contract talks is ILWU’s concern about automation of terminal operations and its threat to jobs: “There are a number of key and critical issues in this and previous negotiations, automation being one of them … as technology continues to move, we cannot leave the worker behind. Finding a way to coexist with this speed of advancing technology and bringing the workforce along is absolutely key to what we need to be able to grow capacity but not cut the workforce as dramatically as it’s been done in the past … We’ve got to find ways to be able to handle these peaks and valleys much better and have our workforce prepared to do that.”
UP & BNSF Performance
During the recent supply chain crisis at the Ports of Los Angeles and Long Beach, there were considerable delays by the two railroads serving the ports. The Union Pacific (UP) and the Burlington Northern Santa Fe (BNSF) were criticized for not moving containers off the docks and on to trains transporting containers to Midwest customers.
One of the reasons, critics say, is the two railroads and other major railroads fired workers and cut back on operations boosting profitability at the expense of service. A railroad strike was narrowly averted.
Even so, Seroka praised the efforts of the UP and BNSF: “We work very closely with both Western railroads, Lance Fritz (CEO Union Pacific) and Katy Farmer (CEO Burlington Northern Santa Fe). Both are keen on investing and developing talent. If you put all these pieces together, the fast transit times from Asia to Los Angeles, the more than 2 billion square feet of warehousing in Southern California, the two great Western railroads and this port with its marine terminal operators, there’s no better combination than bringing this all together. We’ve gotta be in lockstep, in sync on how we continue to develop infrastructure, digitalization, and our workforce.”
Goods Movement Training Campus
Seroka said the Ports of Los Angeles and Long Beach are supporting workforce development and this is “the main reason we’ve created this Goods Movement training campus, the first of its kind in the United States to reskill, upskill and bring new folks into the workforce. That can be our future.”
State of the Port Highlights
Highlights of Seroka’s ‘State of the Port’ address included:
• The Port of Los Angeles “started 2022 … with 109 vessels in our queue. Yet, we ended with a disappointing 20% decline that began last August. That was triggered by an early peak season, the shifting of cargo to the East and Gulf coasts, and now more recently, a nationwide slowing of imports” even so he said that “nearly 10 million container units crossed our docks.”
• The Port continues to move forward with its zero emissions policies and “dedicated funding will help us partner with port customers and stakeholders to reach our zero-emission (ZE) goals. It will also put us on the path for a ZE drayage fleet by year 2035.”
Seroka explained how the Port is working with manufacturers and leasing companies to make ZE trucks available and affordable, “These trucks are not only costly, they’re not commercially available.” To address the situation Seroka explained, “So last month, we issued separate grants to get more pre-production ZE big rigs on the street. Thanks to that funding, a total of $6 million was awarded to two local trucking companies who will use the funds to purchase a total of 22 pre-production battery electric trucks. That’s 22 big rigs out of the roughly 20,000 in our drayage fleet today. It’s a good start, but the process is complicated… One of the companies that was awarded funding is Gardena-based MLI Leasing. They’ll use their $3 million grant in partnership with Peterbilt to produce and deploy 10 ZE trucks, which will arrive later this year… For companies like MLI leasing, we must make the transition to ZE trucks easier, and that means removing red tape and cost barriers. It also means modernizing our laws on every level.”
• The Port’s investment in digitization and its Port Optimizer system has improved cargo forecasting to help importers have better data on cargo arrivals. The Port is planning to expand the Port Optimizer functions to provide exporters better data on vessel schedules, create a truck reservation system and “a unique interface that shares data on warehouse conditions across Southern California.”
• The Port is also working with the Ports of Shanghai and Singapore on ‘Green Shipping Corridors’ and “will help develop clean fuels, new ship technologies, and best practices. Together, these corridors will drive our largest ocean carriers to begin testing and transitioning to zero lifecycle carbon ship operations.” He added that: “We are close to announcing an implementation plan for the Shanghai corridor and, at the end of this month, we will host the first meeting of the Singapore Green Shipping Corridor.
• The Port is a partner in developing a new hydrogen fuel hub: “We’ve also joined a statewide coalition called the Alliance for Renewable Clean Hydrogen Energy Systems or ARCHES, which is applying for up to $1.4 billion from the US Department of Energy to establish a green hydrogen hub anchored right here in the Port complex.”
