Los Angeles Business Journal

All Hands on Deck

OP-ED: Local, state leaders must work with L.A., Long Beach ports to battle rising cargo rivals. By John McLaurin Monday, February 17, 2014

More than $300 billion worth of cargo moves through the ports of Los Angeles and Long Beach, supporting 315,000 jobs in Southern California and millions more across the nation. The forces – either good or bad – that affect these ports and the movement of goods they support have repercussions, not only locally but across the state and the nation. 

Strategic investments made by previous leaders of the ports – such as dredging, and the development of large amounts of land, highway and rail access for cargo delivery throughout Southern California and the nation as a whole – have provided the key ingredients for success. In addition, marine terminal operators have invested billions of dollars in new equipment, terminal upgrades and environmental improvements.

Despite the success that our ports have achieved over the years, they are also facing a number of challenges – all of them extremely serious.

Port development and expansion across North America will lead to more competition for the cargo and revenue that currently flow to California.  

In the mid-2000s, many in California ridiculed port development in remote locations, such as Prince Rupert, Canada. However, that container terminal – built in the middle of nowhere – is now reaching capacity and is planning to expand.

States including Texas, Alabama, Florida, Georgia, the Carolinas, Virginia, Maryland and New Jersey recently designed, constructed and completed port development projects in a fraction of the time required by California’s environmental review process – a process that sometimes can be measured in geologic terms. 

In addition, other states and the governments of Canada and Mexico are much more aggressive in marketing their port systems than California. For example, Gov. Rick Scott of Florida recently launched a campaign to spend millions of dollars expanding the state’s ports in preparation for an expanded Panama Canal, which will be completed in 2015. Other East Coast states had President Barack Obama visit to talk about the use of federal funds to prepare for additional vessel traffic, enabled by an expanded canal. Vice President Joe Biden recently visited the canal’s expansion project, praising the work being done. By comparison, our state has done relatively little to promote the use of our public ports, operating under the false notion of, “We’re California. Cargo has to come here.”

On top of all of this, we also have seen a shift in some manufacturing from China to South Asian countries, resulting in vessels and cargo interests making greater use of the Suez Canal and ultimately East Coast ports. 

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