Port of LA Executive Director Gene Seroka discussed the shift in cargo market share that has been taking cargo to other ports during a presentation to the Los Angeles harbor commissioners on Thursday, Oct. 19.
The trend isn’t new but poses major challenges to the twin ports of Los Angeles and Long Beach. The causes are complex and solutions are not easy or quickly available, Seroka told commissioners at their regular meeting.
In 2007, he said, five large container ports on the West Coast — Los Angeles, Long Beach, Seattle, Tacoma and Oakland — had 76% of the Trans-Pacific cargo business.
“Today that’s 58%,” Seroka said, “a loss of 25% of the market share.”
And that, he said, translates to jobs that are provided through the port.
Closer to home, he said, in just the Los Angeles-Long Beach port complex, those numbers also saw a 25% decline in market share.
At the same time, gains have been made at ports on the Gulf and East coasts, which have been aggressively expanding infrastructure and have lobbied for — and received — federal funding for that from Washington, D.C.
The fastest-growing port in the U.S. is in Savannah, Georgia, Seroka said, citing data from the Pacific Merchant Shipping Association.
The drivers behind the loss of cargo on the West Coast, he said, are several, such as the high cost of doing business in California — including because of environmental regulations — and what is often the “heavy hand” of regulatory agencies.
The pandemic backup and a lengthy labor contract process — which sparked fears of a work stoppage — added to some cargo migrating east in more recent years.
But cargo volume at the ports, Seroka added, is still expected to double by the year 2040, creating a push to use the land and operate more efficiently. Bigger ships will be part of what will be coming over the next decades.
While recent months have generally seen a decline in cargo, September saw reasons for optimism in the short-term.
Both ports, in other news, indicated strong September cargo numbers.
The Port of Long Beach, for example, reported it had its busiest September on record as consumer demand for holiday-related goods and the recent labor pact ratification brought in higher numbers.
Dockworkers and terminal operators moved 829,429 tweet-foot equivalent units in September, which was up 11.8% from the same month last year and surpassed a previous record set in September 2020. It was the first year-over-year cargo increase at POLB in 14 months.
The Port of Los Angeles will release its September numbers on Monday, Oct. 23, but a spokesperson indicated the numbers for POLA were also strong.
Improving infrastructure, the port’s planned workforce training campus and ambitious pollution-cutting measures, meanwhile, will all be part of the ports’ progress, Seroka said, also noting that goods moving through other ports cause more pollution.
“If there was anything learned from the COVID surge,” Seroka said, referencing the monthslong backlog during the pandemic, “it’s about how we modernize our infrastructure.”
“We want to make sure we get to zero emissions by the dates we’ve committed to,” he said, referencing the twin ports’ deadline to have a zero emissions truck fleet by 2035, as well as entirely zero-emissions cargo equipment by 2030. “There’s nothing more that I want, but we’ve got to have a strong balance and the equipment has to be affordable” for truckers, who bring in about $63,000 a year.
The average battery electric truck is selling at about $400,000 apiece right now, he said.
From 2010 to 2020, Seroka also said, federal investment in Gulf and East coast ports outpaced the West Coast ports $11 billion to $1 billion.