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Friday, February 21, 2014

Port of L.A. aims to compete with rivals, boost container, cruise ship, export and cargo businesses


By Donna Littlejohn, February 21, 2014

Facing future competition from ports as close as Mexico, Port of Los Angeles officials on Thursday outlined business strategies they said would be needed to ensure the port retains and expands its role as a global shipping hub.

The strategies outlined at the regular Board of Harbor Commissioners meeting included focusing on new customer and shipping alliances as well as partnerships with terminals.

The port’s objectives include:

• Grow container business by 3 percent annually.
• Increase the cruise ship passenger count by 15 percent over three years.
• Increase export business, with a goal of converting 75 businesses that can export goods by 2017.
• Increase cargo support revenues and rentals such as trucking, warehouses, rail, tugs and barges by 10 percent.

“This has been a long time in the making,” said David Mathewson, director of planning and economic development, about the strategy outline presented to commissioners.

The springboard was a five-year plan for port objectives developed in 2012 that stressed the need to grow market share and revenues using such strategies as customer shipping alliances and partnerships, said Mike DiBernardo, director of port business development. The plan presented a blueprint for growth and job creation and also addressed such issues as optimizing land use and strengthening the relationship with surrounding communities.

The Port of Los Angeles leads ports worldwide in container volumes because of its proximity to Asia, a large local market for shipped goods, available warehouses, a chain of distribution centers and a strong labor pool.

 The existing skilled labor workforce in the ports of Los Angeles and Long Beach handles more than 40 percent of the nation’s inbound containerized trade, according to the report.

But barriers to growth exist, including competition from other ports on both coasts and particularly from the rapid growth of Canadian and Mexican shipping ports on the West Coast, an issue expected to play a significant role in the upcoming labor contract negotiations.

Increasingly, East and Gulf Coast ports are capitalizing on inland connections to move goods by land into the Midwest, a key consumer battleground that has emerged.

Contributing to that trend is a $5.25 billion widening of the Panama Canal that would allow Asian container ships to bypass Los Angeles and Long Beach and move onto ports along the East and Gulf coasts.

“We need to become the most efficient port in the United States,” Commissioner David Arian said. “Six or seven years ago, (the target goal) was to become the cleanest. But now it’s efficiency, that’s what’s going to make the difference.”

Arian said Mexico ports still pose the greatest challenge.

“If they get their stuff together, they’re going to be our main competition, not the Panama Canal,” he said.

Additional strategies outlined Thursday call for offering more incentives and fostering partnerships between shipping companies and individual terminals.