The Port of Long Beach will spend $788 million this fiscal year to improve its infrastructure, green its operations and keep competing ports from taking any of its cargo.
“Panama, the East Coast, Canada and right next door — they all want our cargo,” Al Moro, acting executive director at the Port of Long Beach, said Thursday in the annual state of the port address.
Moro, who joined Long Beach 16 years ago and was chief harbor engineer before being named acting executive director last summer, said the competition for cargo is more intense and the stakes for ports are higher than he has ever seen in his port career.
Carriers today are flooding the global trade lanes with vessels that are so large they will not even be able to fit through the Panama Canal after it is widened in 2015.
Several years ago, Long Beach was expanding its infrastructure to handle vessels with capacities of 8,000 20-foot containers. Two years ago, Mediterranean Shipping Co. deployed the first 14,000-TEU ship ever to call in the U.S., and now MSC and CMA CGM are serving Long Beach with 14,000-TEU ships, he noted.
Big ships need deep water and big terminals if they are to be accommodated efficiently. Long Beach has a main channel depth of 76 feet, and it is expanding its terminals to handle vessels that regularly discharge and reload more than 5,000 containers in a single call. Some lines have recently generated 10,000 container moves in a single vessel call.
Moro cited the construction that is under way on the Middle Harbor facility as an example of the types of marine terminals that are required to handle the newest generation of ships. Middle Harbor, which is operated by the OOCL organization, will cover more than 300 acres, and at full build-out will have an annual capacity of 3 million TEUs.
If that capacity were filled today, the Middle Harbor terminal would rank as the fourth-largest seaport in North America, he said.
Building bigger terminals with modern road and rail infrastructure is only the price of admission to the big-ship era, Moro indicated. Ports must work with terminal operators, shipping lines, truckers, railroads, labor and beneficial cargo owners to raise cargo-handling productivity to world-class standards.
Moro noted that The Journal of Commerce in 2013 named Long Beach the most productive port in the Americas in terms of vessel berth productivity and presented the port with formal recognition at its Port Productivity seminar in December in Newark.
Ports, especially those such as Long Beach that do not receive state subsidies, must be financially sound in order to pay for infrastructure development and raise money in the capital markets. Long Beach this year will report net income of $180 million. “No port does better,” Moro said.
Long Beach’s 10-year, $4.5 billion capital expansion program is likewise the largest among U.S. ports, Moro said, and will result in infrastructure projects that enhance vessel, terminal, truck and rail productivity.
Also included in that price tag are projects that will continue to slash pollution. The green-port program that the harbor commission adopted in 2005 has reduced diesel emissions from all sources by 81 percent. Vessel pollution has been reduced 95 percent through programs that include the installation of shore-side electric power for vessels at berth. “Our goal is to be the first zero-emissions port,” he said.
Long Beach, like most U.S. ports, took a hit during the 2008-09 global economic recession, but its container volumes are coming back strongly. Business dropped by one-third during the recession, but has since picked up, and in 2013 Long Beach led the major U.S. ports with an 11.3 percent increase in container volume to 6.7 million TEUs, he said. Long Beach’s peak year was 2007, when the port handled 7.3 million TEUs.