Larry Mantle hosts a discussion on the future of LA’s ports at the Queen Mary in Long Beach on June 2, 2015.; Credit: Louis Felix/KPCC
Most Americans don't realize just how much of an impact ports like those in L.A. and Long Beach have on their everyday life. Many of the things we rely on daily came through one of the twin ports before finding their way to American homes and businesses.
The ports of Long Beach and Los Angeles are still the largest in the country — about 1/3 of the shipping comes through the ports. That's more than 4,400 ships annually. Still, their combined share of U.S. shipping cargo has been dropping recently.
In addition, the congested ports face the prospect of larger ships and more cargo, grinding labor issues, more strict environmental standards, and evolving technology that is changing how shipping companies and ports handle cargo.
As part of AirTalk's 30th anniversary series, we put together a panel of seven major stakeholders in the ports’ future aboard the historic Queen Mary in Long Beach. There, they discussed the economic, environmental, logistical, and social challenges facing Southern California's ports in the years to come.
Economic challenges
In Long Beach, a well-functioning port can mean the difference between a thriving and struggling local economy, said Port of Long Beach CEO Jon Slangerup.
“For the city, which is about 500,000 people, we employ, through the port, about 1 out of 8 jobs, so it’s a significant impact on our community. And, of course, regionally there’s about 300,000 jobs that are directly affected by the work that goes on at the Port of Long Beach.”
“This is a hub for economic growth, particularly here in Southern California,” added Los Angeles Board of Harbor Commissioners vice president Dave Arian. “Millions of people throughout the United States work as a result of these two ports. So this is an important thing. For example, just in wages alone, the longshoreman invest nearly $1.2 billion in the Southern California economy.”
Manufacturing has been on the decline in Southern California, and UCLA economist Goetz Wolff said that decline and the growth of the ports are impacting Southern California's economy.
“Ironically, the ports have allowed more products manufactured offshore to come in, in a sense to undermine manufacturing, which is a tragedy," Wolff said. "On the other hand, the fact that the industry as a whole provides so many jobs for the region really is important.”
Wolff also cautions that people should differentiate between the jobs that the ports create. On one side are longshoremen who are paid well and get benefits. On the other, you have workers like the port truckers and warehouse workers, whose jobs aren’t nearly as desirable.
Port truckers’ struggle
One of the biggest challenges facing the ports is how to work with the truck drivers who carry cargo to and from the ports. Unlike the longshore workers, the port truckers don’t have a union, and are still fighting for better wages and more backing from the companies for which they haul.
“Over the last several years, there’s been huge unemployment in this country,” said Nick Weiner, national campaign director for Justice for Port Drivers.
“There aren’t choices for these truck drivers," he said. "These are the jobs that exist, and they’re a necessary job. Cargo from the ports here, I think, go to every Congressional district in the country. Everyone in this nation depends on the ports, including these truck drivers, so they should be good jobs.”
UCLA economist Goetz Wolff added that most truckers are paid based on the load they carry, not the hours they work.
“The nature of the port trucking system is one which has relied on a legal fiction that the truck drivers are independent owner-operators, which makes them seem as if they were totally entrepreneurs and businessmen," Wolff said. "But really, they are, in effect, captive workers responding to the immediate demands of the various trucking companies that hire them.”
The result? Drivers who work 20-30 hours more each week that most Americans and bring home a fraction of the pay, Weiner said.
"I've seen too many paychecks from too many drivers…where they work 60 or 70 hours a week, haul many containers and bring home $100 at the end of the week," he added. "I’ve seen paychecks where they owe their employer because of the deductions taken out of their paycheck for fuel, for insurance.”
Environmental challenges
Making Southern California’s ports greener is one of the most daunting challenges facing the complex in the years to come. While environmentalists said both ports have made efforts to reduce their carbon footprint, Natural Resources Defense Council attorney Morgan Wyenn said efforts haven't gone far enough.
“I think it’s definitely a ‘two steps forward, one step back’ sort of situation," she said. "No one can deny that both ports have shown incredible leadership and are a model for many ports around the world, and we have applauded them and supported a lot of their efforts. On the other hand, there’s a huge amount of work left to go. The port environmental pollution problem is complicated and very expensive to fix, and I think we’re still a long way from the solution.”
Wyenn said the next big step for the ports must be to transition to zero-emission technology. While initiatives like the clean truck program — which sets higher environmental standards for the trucks used to haul cargo into and out of the ports — have made some progress, she’d also like to see more equipment used to move containers switch over to electric power instead of gas. She added that truck drivers are often forced to pay to fix their own trucks, and the clean diesel technology used in some of the newer vehicles can make that incredibly expensive.
“Truck drivers are often left footing the bill to maintain these trucks," Wyenn said, "which is a very expensive endeavor, so often maintenance is not done properly, both for safety and environmental issues. So we don’t have the filters working the way they should, so the trucks are not as clean as we hoped that they were going to be. Transitioning them to be zero-emission trucks is going to be a huge financial investment and we’re going to need incentives and grants from every level of government and new incentive programs.”
Wyenn said she has high hopes for the future of the port complex, and while she’s confident that progress can be made, it will rely on the ports’ leadership.
With ‘monster ships’ come monster issues
As demand for goods increases, the port has had to adapt to larger and larger vessels. Cargo ships today can be twice as large as those constructed just four years ago. Dredging, new canals, and new technology have all been introduced to ease the ports and their staff into the transition, but work remains.
“The big ships have fundamentally changed everything,” said Slangerup, “but we have not yet responded holistically to that challenge. We’ve been preparing for years for this and we have invested billions of dollars to do it, so I don’t want people to think that we’re sitting here waiting for these big ships to come and not be prepared. We’re totally prepared.”
“Obviously there’s interaction that goes on between the terminal operators, the shipping lines, and the ports to make sure that when their vessel arrives, it can be accommodated,” added Pacific Merchant Shipping Association vice president T.L. Garrett. “One of the factors with the newer generations of vessels is they haven’t necessarily needed deeper channels than previous generations, so some of the work that had been done prior to this already accommodates those newer, larger ships.”
Not everyone agrees that enough has been done to ready the ports and their employees for the monster ships. International Longshore and Warehouse Union (ILWU) Local 13 President Bobby Olvera, Jr. said that the ports have known for years that the bigger ships were coming, and instead of investing in more manpower, threw their money at outdated technology.
“It’s greed," he said. "I think they’d rather spend their money on unproven technologies. Even in recent days, we’ve had marine terminal operators come to us and say ‘Our technology isn’t working. We can’t say it publicly, but it’s not working. Help us.'”
Dave Arian with the Port of L.A. said when you can build a monster ship that moves 100 times as much cargo as before within one year, there’s no way to adjust to that overnight.
“It’s been created by the industry itself," he added. "The blame always goes on labor, it goes on ports, but it was created by the industry itself to be more competitive, to lower the cost of shipping a container, and that’s really what’s created by the industry. How do we solve it? We’re working on it.”
Shipping and supply chain challenges
Another hurdle facing the port complex is how to best streamline the supply chain so that products move from manufacturer to port to store shelves in as quickly and efficiently as possible. Pacific Merchant Shipping Association in Long Beach Vice President T.L. Garrett said when his members consider ports, they look for good infrastructure that will allow them to move their cargo quickly to the marketplace.
“You have to view my members, the shipping lines and the terminal operators as kind of a UPS," he said. "We don’t own the cargo that’s in the boxes but we’re responsible for getting it to the customer on time. So, from our perspective, what’s most important is having the facilities at the ports that can meet those needs so that we can efficiently move the cargo.”
Jon Slangerup with the Port of Long Beach said that can be an struggle; the entire supply chain — including the ocean carriers and terminal operators — are part of very disparate systems.
“It’s not a connected, integrated supply chain," he said. "Because of that, there’s a dearth of information that drives visibility of the move of a container from origin all the way through to destination.”
Garrett added that the process to upgrade can take an excruciatingly long time, and that frustrates member companies.
“It’s ever-ongoing in both of these ports," he said. "They continue to evolve, but some of the processes take an exceedingly long time to enable us to take full advantage of the modernization. There are projects that, by the time they’re actually constructed, some of the technologies are already obsolete.”
Bobby Olvera, Jr. of the ILWU Local 13 disagreed, saying he believes the ports and terminal operators invested in failed technology instead of a larger workforce.
“What we’ve done is gone back to a traditional sense of working on the waterfront. It’s more labor-intensive," he said. "I think they invested in the wrong thing. They should’ve invested in human capital, hiring people, providing more full time workers so that, when we do hit peak, the people are there to work. ”
The big picture
While progress has been made in the modernization of L.A.'s port and streamlining its supply chain, a lot of work still has to be done in order to bring the ports into the 21st Century.
ILWU's Olvera said the future of the ports will impact the communities that surround them most heavily.
“I think, for the individuals that work in the ports, they’ve invested in this community," he said. "The wages they earn here in the port get spent in the community. And they have a unique perspective, because they live here, so the environment is important to them and congestion on the highways is important to them, but the ability to have a good middle-class income, put their kids through college, pay their taxes, I think that’s foremost in their minds.”
“If we’re looking to the future, we’re looking at a different model,” said the Port of L.A.’s Dave Arian. "We’re looking at a model where a container comes into a terminal and it stays there no more than 24 hours. You create satellite terminals where you can move the containers more efficiently, and the question of efficiency is going to be the determination of where cargo flows, because that determines cost. For the Port of L.A. and for the Port of Long Beach, it’s a question of efficiency and how we get there.”
You can hear the broadcast audio for today's segment above. As an extra, we're including the fascinating question-and-answer session that followed it below.
Guests
Jon Slangerup, president and CEO of the Port of Long Beach
Nick Weiner, campaign director for Justice for Port Drivers/Teamsters Port Division
Bobby Olvera, Jr., president of the Local 13 of the International Longshore Warehouse Union, which represents 7,000 members in the Southern California area
Goetz Wolff, economist and lecturer of urban planning at the UCLA Luskin School of Public Affairs
Dave Arian, vice president of the Los Angeles Board of Harbor Commissioners, which oversees the Port of Los Angeles
Morgan Wyenn, staff attorney for the Natural Resources Defense Council
T.L. Garrett, vice president of the Pacific Merchant Shipping Association in Long Beach