In an industry obsessed with container volumes and market share, the new chief executive of the Port of Long Beach on Thursday unveiled his plans for the port amid continuing delays tied to still-unresolved West Coast longshore negotiations and other issues that have crippled container movements at Long Beach and the neighboring Port of Los Angeles.
The Long Beach port of the future will be a “smart port,” as he described it, that uses technology to link all supply chain participants in a unified effort to increase cargo velocity, and an “energy island” that is a self-sustaining generator of clean energies.
“We have a choice,” Jon Slangerup said in his annual “State of the Port” speech. “We can watch our business go elsewhere, or we can come together to change the way our supply chain works by using the latest information technology to efficiently move containers from origin, through the ports, aboard trucks and trains and on to their destination,” he said.
Long Beach in 2014 handled 6,820,806 20-foot container units, an increase of 2 percent from 2013. Like other West Coast ports, it is coping with immediate challenges of terminal congestion and work slowdowns tied to the ongoing and still-unresolved contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association.
Slangerup’s comments, however, were directed at the systemic problems and challenges that will remain after there is a new coastwide contract. Increased cargo velocity is crucial in today’s world of big ships operated by cost-conscious carrier alliances. Virtually every move shipping lines make today is based on reducing operating costs. Ordering large vessels with capacities approaching 20,000 TEUs is at the heart of the carriers’ strategy.
Slangerup noted that Long Beach is the only U.S. port where 14,000-TEU ships already make calls. The port is spending $4 billion, more than any other U.S. port, in the coming decade to expand and improve its infrastructure so vessels with capacities of 20,000 TEUs can be worked quickly and efficiently, he said.
Operationally, Slangerup called for improved block stowage of container ships in Asia built around destination hubs in the U.S. Also, handling cargo surges from big ships requires better tracking of containers from origin to destination and increasing Long Beach’s use of on-dock rail from 23 percent of container volume at present to 35 percent. The introduction of a gray chassis pool for the Long Beach-Los Angeles harbor will take place in the coming month.
The two ports are awaiting Federal Maritime Commission approval for a discussion agreement that will allow them to jointly address the many causes of port congestion, a critical problem today at many large ports and an issue that has reached crisis proportions in Southern California. “Congestion is the single toughest issue we face,” he said.
While most U.S. ports can identify with Slangerup’s operational strategy, which he said can potentially reduce supply chain costs by 30 percent, his plans for an energy island will undoubtedly raise some eyebrows. He envisions the use of electricity, windmills, solar cells, cold-ironing of frequent-caller ships at berth, “sock on a stack” technology to capture emissions from less-frequent calling vessels and other clean technologies to reduce diesel emissions to as close to zero as possible.
Long Beach has extensive experience in the use of clean technologies. This year marks the 10th anniversary of the adoption of its Green Port plan that has already reduced diesel emissions by 82 percent. Los Angeles has recorded similar gains, making the Southern California port complex the greenest in the U.S., if not the world. Cargonews Asia named Long Beach the world’s greenest seaport last year.
The port’s plan relies heavily on the electrification of container terminals. The $1.3 billion Middle Harbor terminal, which will open Phase 1 this summer, will eventually be totally electric. It will serve three purposes: expanding the port’s total throughput capacity by 20 percent, driving increased container velocity and advancing the port’s goal of approaching zero emissions.
However, Middle Harbor and other automated container terminals that are likely to follow will place a tremendous burden on the city’s old and already-taxed electrical grid. Long Beach plans to develop an energy island, a self-sustaining source of energy generated by sun, wind, sea, fuel cells and other forms of clean energy.