1. JANUARY 21, 2013 COMMENTARY LOS ANGELES BUSINESS JOURNAL 4
Keeping L.A. Afloat
Government, businesses and labor
must row together to keep port's cargo
and economy moving.
More than ever, our
By GERALDINE KNATZ future in Los Angeles
is tied to our
s executive director of the Port of Los Angeles, one of
A my recurring nightmares is waking up to discover that
the Western Hemisphere's busiest port has ground to a
halt. Unfortunately, that nightmare became a reality for a week
engagement in the
global marketplace.
last month due to a labor dispute. Cargo operations essentially
ceased during the strike. It was a stark reminder of the enor-
mous economic impact the San Pedro Bay port complex has on
the Southern California region and what's at stake in the future.
What I found remarkable is what happened when the strike In and Out: China Shipping freighter at Port of Los Angeles.
ended. The nation's busiest port sprang back to life immedi-
ately. Linesmen, pilots and tugboats were dispatched within an
hour of the announcement of a tentative deal, and ships started cargo will come from that will fill that terminal? Simply put, Even with the investment being made by the port to remain
moving. By daybreak, thousands of workers, dozens of trucks competition is more intense than ever. competitive, factors beyond our control will dictate whether we
and billions of dollars of infrastructure investments proved So how do we maintain and grow market share when the San win or lose. Our railroad partners, who have invested in heavily
that we have the bandwidth and resources to recapture a Pedro Bay port complex has a target on its back? The Port of Los upgrading their facilities and equipment, must keep their rates
week's worth of backed-up cargo very quickly. Angeles adopted a five-year strategic plan in April that is a blue- competitive. Cargo terminal operators and labor need to have a
No trade gateway in North America can move so much cargo print for responsible growth and job creation. It focuses on com- stable relationship because customers demand certainty and reli
so efficiently. That's why it is essential that business, labor and petitive operations, strong relationships and financial strength. ability. If we cannot assure our customers the reliability of unin
government unite to make certain that this port complex remains The foundation of the plan is built upon our commitment terrupted service with competitive rates, we will lose them.
the leading global trade gateway in North America. We cannot to maintain and develop our world-class infrastructure. With a After the 2002 labor dispute shut down ports along the West
afford to let other ports chip away at the jobs and economic five-year, $1.2 billion capital improvement plan, the port is Coast, it took years to convince our overseas customers that we
vitality that is so critical to Southern California. investing about $1 million a day to deliver terminal, wharf and could be a reliable port. We can't afford those questions today.
Based on a recently updated economic analysis, the ports transportation projects on time and budget. We're fortunate to have business groups such as the L.A.-
of Los Angeles and Long Beach in 2011 had a $310 billion The port recently completed deepening its main naviga- based Beat the Canal initiative, the Los Angeles Area
impact on the economy. That translates into 900,000 jobs in tional channels and basins to a 53-foot depth, ensuring that we Chamber of Commerce, the Central City Association and Job
Southern California and more than 1.2 million jobs statewide. can accommodate ships of all sizes for decades to come. First Alliance advocating for our capital development projects
It's been well publicized that the widening of the Panama We're expanding and modernizing container terminals, about to move forward expeditiously. It's this kind of partnership
Canal is only two years away, a project that could result in to break ground on a rail yard and have several projects under and understanding of the port's importance that will allow us
the biggest ships passing us by to serve America's heartland environmental review. All of this is taking place while air pol- to maintain our competitive advantage.
from East Coast ports . That's our market! As America's port, lution from port-related sources has been reduced by as much More .than ever, our future in Los Angeles is tied to our
more than 40 percent of our cargo goes east, most of that to as 76 percent over the last five years. engagement in the global marketplace. The Port of Los
the Chicago area. Less known is the increased competition Because of our size, regional warehousing resources and Angeles is blessed with what I refer to as the "L.A.
coming from ports in the Pacific Northwest, Western Canada speed-to-market connectivity, our customers achieve an econo- Advantage." For everyone's sake, let's work together to make
and Mexico. my of scale that makes it competitive to do business here. sure we keep it.
OUf largest terminal operator has broken ground, with When the recession hit several years ago, some of our cus-
plans to spend nearly $1 billion, on a container terminal at the tomers began consolidating their shipments through the Port Geraldine Knatz, Ph.D., is the executive director of the Port of
Port of Lazaro Cardenas in Mexico. Where do you think the of Los Angeles. We need to keep that cargo on our doorstep. Los Angeles.