Mar 09, 2018
Gene Seroka, executive director of the Port of Los Angeles, told AJOT that collaboration with General Electric on a new digital information system will help boost productivity in 2018 after a record 2017 in which the Port continued to be number one in the United States.
Supply chain efficiencies, new technology use and terminal upgrades were cited by the Port for its record year in 2017 where it moved more cargo in 2017 than in any time in the Port’s 110-year history, racking up 9,343,192 Twenty-Foot Equivalent Units (TEUs), a 5.5%, increase over 2016’s record-breaking year. It’s the most cargo moved annually by a Western Hemisphere port.
“We are extremely proud of the role our workforce has played in achieving this cargo milestone, and in keeping the San Pedro Bay port complex the number one trade gateway in the U.S.,” said Mark Mendoza, president of the International Longshore and Warehouse Union 13.
However, Seroka expressed a note of caution: “Normally I would be able to forecast growth for 2018 but the uncertainties around trade and tariffs do not allow us to do so at this time. We have to wait and see what happens. We have to keep our eyes on the importance of trade. I can tell you we did well in the first two months of 2018.”
Genesis of the General Electric Project
After the West Coast port slow-down of 2014-2015, Seroka was determined to improve operations at the Port and reduce congestion. Improving data collaboration was the chosen vehicle for this change.
A Request for Proposal was issued by the Port and General Electric “scored the best…We wanted a wider lens to harvest all the data flows that port stakeholders utilize to help make them more efficient.”
A Port background paper notes that the General Electric Port Optimizer aggregates key cargo data online to facilitate better cargo tracking, projections and productivity.
The Port and GE Transportation surveyed users involved in the initial pilot project. Results were overwhelmingly positive with most respondents agreeing the data in the portal is easy to understand and easy to access.
“This project has been a home run,” said John Ochs, senior director at APM Terminals, the site of the pilot project. “The Port of Los Angeles has transformed data into information that can be utilized by stakeholders to optimize their goods movement processes.”
“The Port of Los Angeles and GE Transportation have become the global leaders on trying to digitize the supply chain and bring efficiencies to the maritime industry,” said Weston LaBar, executive director of the Harbor Trucking Association. “A trucking dispatcher may visit up to 40 websites a day just to coordinate cargo movement into the port complex. Having a single portal, a single reference point, will create new levels of efficiency that we’ve been seeking for a long time.”
The GE technology will allow terminals, truckers and railroads better forecasting data 10 to 14 days in advance of the arrival of a vessel so as to plan container handling needs, trucking requirements and the number of trains for rail moves.
Seroka noted that the ports of Los Angeles and Long Beach have collaborated for many years on environmental issues, safety, infrastructure and most recently on supply chain issues. Expanding the GE concept to the Port of Long Beach was an extension of that collaboration.
At the Trans Pacific Maritime conference in Long Beach, Dr. Noel Hacegaba, managing director for commercial operations at the Port of Long Beach said that the Port of Long Beach is adopting the GE Port Optimizer as a pilot project to test its benefit to its stakeholders.
Challenges for the Port
There are several challenges facing the Port in 2018:
Deferring the Widening of the 710 Freeway
The Los Angeles Metropolitan Transportation Authority announced on March 1st that it was deferring the proposed widening of the 710 freeway, a key link between the two ports and Southern California warehouses. Seroka responded that there was substantial community opposition to the freeway widening and that “we have to find better ways to move freight.”
Truck Wait Times Rise
The Harbor Trucking Association said that wait times for trucks at the two San Pedro Bay ports had worsened from a low of 64 minutes in 2014 to 76 minutes in 2017. Seroka said “We have to fix this and make the system work better.”
This is an area where the Port Optimizer will help: providing better truck and chassis supply forecasting before a ship arrives; creating an improved appointment system; better container drop off and pick time frames; and improved container priority pick up and delivery sequences at terminals.
Market Share Losses
In February, the Pacific Merchant Shipping Association (PMSA) noted that U.S. West Coast ports and the two San Pedro Bay ports lost market share to Gulf and East Coast ports in 2017. Seroka admitted that the Gulf and East Coast ports have increased investment in their infrastructure and in cargo-handling. Cargo owners began to diversify their port choices away from the West Coast after the 2002 labor lock-out and again after the 2014-2015 slowdown. In 2002, the San Pedro Bay ports had 50% market share of U.S. imports which has since decreased to 40% The Port Optimizer is one way to improve cargo flows, continuous investment in infrastructure is another
Ultimately, Seroka said, “We have to recognize that we are in a competitive market and that our customers have choices and that we cannot afford to be complacent.”