Ports & Terminals

Port of L.A. Announces Best Month Ever

October volume figures were applauded by port executives, who said the Port of Los Angeles notched the best month ever for a Western Hemisphere container port! Container totals continue to climb Data provided by the American Association of Port Authorities (AAPA) indicated that the port’s October volume was 814,574 TEUs compared to 800,063 TEUs last year. Imports surged 16.4% while exports climbed 23.3% and total volume YTD rose 5.25% over last year. The increased traffic can be attributed in part to the increase of Mega-Ships calling Southern California and the port’s ability to handle this additional volume. LA’s high water mark came in 2007 when the total container volume reached 8.4 million TEUs. A declining economy, labor negotiations and competition caused a significant dip in volume reaching a 2009 low of 6.7 million boxes. Over the last several years however business has rebounded reaching a near record level of 8.2 million containers.  Executive Director Gene Seroka attributes this success to the hard work done by all members of the port community. Applauding labor, the terminal operators and all port stakeholders, he said, “…we have the infrastructure, equipment and human capital to keep the boxes moving."  This comes in the midst of challenges the port has faced over the last few years. Perils at Sea and Bumps in the Road. Los Angeles has dealt with several rough spots in its quest for more volume. A 7.8% surge in containers for September 2014 had facilities scrambling to find chassis and had jeopardized holiday deliveries. A strong peak season, combined with the launch of the G-6 alliance, left terminal operators coping with 3 to 4 day delays in vessel arrivals, also handling and space issues once ships were at berth. Global Gateway South was forced to turn away the APL Norway because they just could not handle the extra volume. ILWU labor negotiations during that same period added to the mix of issues plaguing the port.  The region wide Gray Chassis Pool inaugurated in March of 2015 merged DCLI/DCLP and Grand Alliance pools to create the Los Angeles Basin Pool. In theory there were now sufficient chassis to handle the container volume from both So Cal ports. While that looked good on paper, the reality of positioning sufficient chassis in the right terminals was another matter entirely. Hanjin’s unexpected and untimely demise left ships and containers stranded both at port and in San Pedro Bay. Upwards of 15,000 containers were trapped in Southern California as truckers and terminals were stuck with boxes nobody wanted. Draymen had to scramble to figure out how to retrieve their client’s cargo then rid themselves of the empties. At one point L.A. facilities refused to take back empties realizing they would be stranded on the tarmac. This left wheels under the “ghost” boxes once again depleting So Cal’s chassis supply. Calmer seas and smoother roads Chassis inventories are still somewhat of a problem as leasing companies grapple with the cost of moving units where needed.  But many truckers have taken on their own fleet unwilling to pay the cost of repositioning or spending the extra time to draw wheels from the neutral pool. A successful conclusion to the long shore contract in May 2015 has brought stability back to the waterfront through July of 2019. Both sides have expressed their desire to avoid similar conflict in the next round of talks.  Some of the issues like the repair of chassis are beginning to find resolution with end users, either through maintenance agreement or outright ownership. And finally Korea Line Corp (KLC) has out bid Hyundai for Hanjin’s assets. Korea Line an affiliate of the SM Group holds assets in everything from construction to chemicals.  They even have a 54% stake of Total Terminals International so they know something about port operations. Looking Toward the Future As the Port of L.A. enters the age of Mega-Shipping its facilities will no doubt face challenges in capacity and thru-put.  L.A.’s terminals will have to find unique ways to handle the anticipated volume.  Pier Pass for example has applauded terminal operators for implementing appointment systems to even the flow of cargo through their gates. The traditional system of “random access” can no longer sustain the future volume of containers that will need to exit the terminals in a timely manner.  Automation and modernization will be a key to keeping ahead of cargo flow. TraPac, the first terminal on the West Coast to implement partial automation, has committed to working with labor to move cargo quickly and safely.  Will competition from other ports continue to nip at LA’s heals?  Well that’s the nature of the business!  Strong innovative leadership from the port and its terminal operators may just keep that dog at bay. What will L.A need to do to remain on top?
Matt Guasco
Matt Guasco

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