The Port of Los Angeles moved nearly 10 million cargo units last year — falling just shy of 2021’s record haul — but also saw imports drop precipitously in the latter half of the year, a worrisome decline that had multiple factors, POLA’s leader said on Thursday, Jan. 19.
Gene Seroka, the port of LA’s executive director, discussed that boom-and-bust cycle, other ups and downs from 2022, and ongoing changes to the way POLA does business on Thursday during his first in-person State of the Port address since the pandemic began.
About 500 people listed to Seroka’s address — co-sponsored by the port and the Pacific Merchant Shipping Association — at the Los Angeles Cruise Terminal.
Among the causes for the second-half cargo decline, Seroka said, were the languishing labor contract talks, whch have spooked some shippers to move cargo to other ports out of concern there could be a work stoppage at the ports of Los Angeles and Long Beach, the largest cargo hub in the Western Hemisphere.
“The historic import surge and the various economic trials that we’ve all experienced,” Seroka said, “have stretched our capacity and stamina.
“Through last July, we saw over two years of unprecedented volume — averaging a peak season every month,” Seroka said. “We started 2022 at that same frenetic pace, with 109 vessels in our queue,” many of them waiting outside the breakwater for many days for available berth space.
By the time the year ended, though, there had been “a disappointing 20% decline that began last August,” Seroka said.
Besides the labor talks, the causes included an early peak shipping season, the shifting of cargo to the East and Gulf coasts, and a nationwide slowing of imports, he said.
Still, Seroka said, 2022 will be a “silver medal year” for the port, which will record the “second highest” cargo movement in its 115-year history. It also marks the 23rd consecutive year, according to port officials, that the port has been ranked the busiest container port in the nation — though the last several months saw it drop behind the New York-New Jersey seaport.
The port’s growing cruise industry, meanwhile, logged 229 cruises leaving the Port of LA last year, the most since 2008. Only 61 cruises were logged in 2021, with the pandemic decimating the industry.
Just as many sailings — “if not more” — are expected in 2023 as in 2022, Seroka said, with the cruise industry continuing to regain its footing.
“That’s an economic benefit of more than a quarter of a billion dollars to our local communities and L.A.’s tourism economy,” Seroka said.
The growth will also spur the port to move forward with a study to develop an outer-harbor cruise terminal in San Pedro.
Seroka hit on several other topics during his address. The executive director said:
A framework for a Port of Los Angeles Workforce Initiative, in conjunction with the city’s Economic and Workforce Development Department, will be created to train those who are unemployed, including veterans and people who are homeless.
There will be more focus on the export community through a new Port Optimizer digital tracking feature, which will give U.S. exporters help in saving costs; there also will be a new truck reservation system to help improve efficiency and a warehouse digital module to provide a clearer look at warehouse conditions in scheduling deliveries and pickups.
A continued push will be pursued for infrastructure improvements.
In April, the port will have a ribbon-cutting ceremony for the $71 million Wilmington Waterfront Promenade.
A new slate of waterfront projects will be established as talks continue to preserve the port’s Public Access Investment Plan, which has provided funds for numerous developments requested by the public.
Seroka also discussed the port’s ambitious move to an entirely zero-emissions operation.
On the immediate horizon, he said, is the need to get zero-emission trucks into production.
“We need to help accelerate the ZE market and fast-track the production of those trucks,” Seroka said. “At the same time, we must speed the development of electric and hydrogen fueling infrastructure across the Southland.”
Some 45% of the big rigs in the port’s drayage fleet, he added, are older models that come from smaller businesses.
Those cost about $50,000 each, Seroka said — far less than newer, more environmentally friendly versions.
“How can these businesses afford ZE trucks,” Seroka said, which “are predicted to sell for 8 to 10 times that amount?”
Trucks “are not only costly,” he said, “they’re not commercially available.”
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More grants were issued last month, Seroka said, to speed up pre-production on additional big rigs, with $6 million going to two local trucking companies, including MLI in Gardena; those companies will use the money to buy 22 pre-production battery electric trucks combined, which are set to arrive later this year.
Infrastructure, along with modified tax codes, insurance regulations and other incentives will also have to be considered, Seroka said, “to do whatever it takes to make these trucks of the future commercially available and affordable for our drayage industry.”
“During COVID-19,” Seroka said, “our nation was able to reduce the vaccine production timeline from 10 years to 10 months.
“We need that same sense of urgency,” he added, “to tackle climate change and get ZE trucks on our roads today.”
Mario Cordero, the executive director for the Port of Long Beach, is set to give his State of the Port address on Thursday, Jan. 26.