Half a billion for upgrades at the Port of Long Beach

Half a billion for upgrades at the Port of Long Beach

The Long Beach City Council approved an $858 million budget for the Port of Long Beach for the fiscal year beginning Oct. 1, with two-thirds set aside for a modernization program to keep the port competitive.

For the fiscal year, the Long Beach Harbor Department plans to spend $579 million on capital projects, part of a decade-long, $4 billion investment in port upgrades and efficiency improvements. The ongoing Gerald Desmond Bridge Replacement Project and Middle Harbor Terminal Redevelopment will continue to be the port’s largest construction projects.

The port, the second largest in the U.S. behind neighboring Los Angeles, hopes that improving older facilities and infrastructure will help keep it competitive at a time when threats loom from the 2016 expansion of the Panama Canal, fewer but larger ships and larger alliances that may choose to limit port calls. The Port of Long Beach’s container volume growth in the first half of 2014 slowed to 2.5 percent year-over-year, down from 14.2 percent year-over-year growth in the first half of 2013. Long Beach lost 0.3 percentage points on its first-half 2013 market share, handling 27.9 percent of all container throughput on the West Coast.

“To remain competitive, the port needs to continually reinvest in major facilities upgrades,” said Jon Slangerup, the port’s chief executive as of June, at a city council meeting this week. “We are proud that the Port of Long Beach remains financially strong.”

The Harbor Department receives no taxpayer revenue to operate. Port operations are supported by revenue from terminal leases and fees charged to terminal companies and shipping lines. Another source of revenue is grants from state and federal agencies for roadway, rail and security projects.

“Amid stiff competition,” the port said the budget projects revenue of $346.8 million in the coming year, on par with the current year’s revenues. The approved budget adds 28 new full-time positions, which include 20 in engineering to support capital improvements, and six to enhance port security. The budget also includes $30 million for environmental programs and projects such as technology-advancement demonstrations of a barge-based pollution-control system for ships at berth and an electric highway truck system.