Tuesday, April 20, 2021
Virtual Meeting via ZOOM
Present: Deborah Barmack, Carole Beswick, Greg Bradbard, Mike Burrows, Chris Carrillo, Mark Cloud, Ken Coate, Sandra Cuellar, Michelle Decker, Kevin Dyerly, Louis Goodwin, Fran Inman, Mark Kaenel, Lena Kent, Lowell King, Pam Langford, Mike Layne, Bill Lemann, P.T. McEwen, Darcy McNaboe, Miguel Mendoza, John Mirau, Dan Murphy, Bansree Parikh, Catherine Pritchett, Thomas Rice, Michael Rivera, Dan Roberts, Dan Schenkel, Kristine Scott, Paul Shimoff, Sol Teh, Eric Ustation, Lupe Valdez, Reggie Webb, Ray Wolfe and Marisa Yeager.
Guests: Phil Cothran, LaDonna DiCamillo, Faviola Ochoa, B.J. Patterson, Elisabeth Rosenson and Todd Warden.
Announcements: 1) Staff plans to distribute the schedule of appointments for Inland Action’s 2021 Federal Advocacy. The virtual meetings will be held on April 27 & 28th, 2021. If you plan to participate, please remember to attend the virtual “work session” held on Friday, April 23, 2021 at 8:30a.m. 2) Members are asked to “save the date” for an in-person outdoor gathering on Thursday, June 3, 2021 at Redlands Country Club. A round of golf will be offered and a reception on the patio will follow. More information will follow.
Lowell King, Chair, presiding.
Motion by L. Valdez/Second by T. Rice/Passed: Minutes from April 13, 2021
Lena Kent introduced Gene Seroka, Executive Director, Port of Los Angeles. The Port of Los Angeles is our nation’s number one container port. Gene manages a budget of $1.6B which includes advancing major capital projects, growing trade volumes, and promoting innovative sustainable practices to strengthen the region’s economy, including the Inland Empire. He led the Ports response to the pandemic by keeping cargo flowing as an essential service to the country.
Collaboration is critical to accelerate our economic recovery and our long-term competitiveness as a region. The ports must be in lock step with rail, trucks, and warehouses, as all links must work together to prevent a severe back up of cargo. The Port of Los Angeles is the busiest in the western hemisphere, and the connections with partners like Union Pacific, BNSF, Amazon, Majestic Realty, the Hospital Association and more are strong and long lasting as proved through their collective response as a community to COVID-19. All partners took extraordinary measures to keep critical goods flowing and were successful in the needed push for the State to deem regional warehouses as essential.
Up-to-date information can be found at www.signal.portoptimizer.com, the Nation’s first and only Port community system.
– Improvements across the supply chain have occurred, specifically the reduction of cargo vessels anchored outside the Ports of L.A. and Long Beach. Currently 21 container vessels are at anchor which is a 50% reduction from February. In February, some 90% of arriving vessels had to be anchored outside the breakwater, and it is now down to 70%.
-Docks remain busy with day and night shifts. Since the pandemic changes have occurred in consumer behavior which included an initial buying surge creating an increase of 10-15% above planned capacity. For example, 14 container ships will be processed today which represents a 40% increase in Port productivity. Container dwell time is down by 20% over the last 6 weeks (3.8 days down from 5) as are containers waiting for warehouse or retail space (6.8 days down from 8.2). Improvements are occurring after having implored retailers and importers to step up the pickup of their cargo.
-Rail dwell time has increased and is six times longer than pre-pandemic numbers. All rail partners and the Ports are working tirelessly to speed the momentum to reposition and move out cargo. The increase in rail dwell time is due in part to:
- Rapid succession of vessels that are now back-to-back.
- Inclement weather that affected much of the country.
- Lack of exports and difficulty in getting rail cars and crew back to L.A. fast enough from the interior of the country.
The Ports have had an extraordinary level of activity. In March they experienced a stunning 113% increase in container volume compared to the same period last year by processing 957,599 twenty-foot equivalent units (TEU). They have completed their best quarter in history and year to date are up some 44%. However, yearly comparisons are sometimes misleading due to the monumental swings in cargo.
The export side, however, is virtually flat and has dropped in 26 of the last 29 months. March of 2021 compared to March of 2020 experienced a mere 1.5% increase. Empty TEU’s shipped back to Asia are also breaking records. In March, 344,000 TEU’s were shipped out which is three times as many compared to March of last year. This is the most shipped out in any one month (an increase of 218.6%). The main causes include:
- Bad trade policy from the previous administration created retaliatory tariffs, decimating exports in agriculture, manufacturing, and automotive sectors.
- The strength of the U.S. dollar makes it more expensive for our goods to be purchased in Asia compared to competing countries.
- Shipping companies are consciously moving empty containers back so as to cut transit times.
Labor shift counts are consistently strong with over 50,000 dock-worker shifts this year, a 35% increase compared to the same period last year. This is in great part due to their focus of waterfront workers getting vaccinated. They have vaccinated over 5,000 workers on site, including longshore members, truck drivers, construction, and trade unions, as well as L.A. Marine Terminal Operating staff. They continue to work toward vaccinating every transportation worker in Southern California.
The Port of L.A. is truly a Port of national significance. Not only are they geographically the best situated to bring cargo from China, but there are 2 billion square feet of warehousing, distribution, and omni channel facilities between the Port and the Mojave Desert. They heavily rely on the Inland Empire and estimate that at least 1/3 of all their traffic goes to and from our region.
Retail economists have indicated that on-line shopping has doubled in the last 13 months. As consumers are working from home and unable to travel, they are upgrading appliances, purchasing furniture, exercise equipment and other home goods. This area will continue to grow well into the summertime as more people get vaccinated and businesses reopen, but it will be interesting to see what happens when discretionary spending returns to the service sector in the next 6-12 months.
Q & A period followed.
Meeting adjourned at 8:57 a.m.