West Coast ports gloss over issues of real importance to shipping
Hollywood Syndrome seems to have seized the Port of Los Angeles. Evidence of this lies in its automatic instinct for ignoring, or glossing over, uncomfortable questions.
Marketing Director Mike DiBernardo has rolled out an analysis of costs and time involved in getting a 40-foot container from Shanghai to LA and beyond, compared with other routes. His conclusions, in front of the harbor commissioners (his ultimate bosses) last week, are less than earth shattering, smack of preaching to the converted and skirt more important topics.
The baseline cost is $1300 to LA, vs. $2600- $2700 to Chicago via LA and other West Coast ports, $3000 to the East Coast via LA and $2100 via Suez or Panama. Trip time is 12 days to LA (10 to other West Coast ports), 16 to Chicago via LA (13-14 using other West Coast ports), 19 to the East Coast via LA and 25-29 through Suez or Panama.
And, that makes it a no brainer to use LA, according to DiBernardo (and presumably his bosses also), who even points to other natural advantages such as good weather. At stake is "discretionary cargo", traffic going to or from areas outside the immediate region and which is up for grabs by any port. LA gets about 45 percent of its traffic from discretionary cargo.
What the marketing director fails to point to are the uncomfortable issues. Port users know all the cost differentials that LA is bandying about. They want information about more unsettling questions.
Clean Truck ownership policy. For some reason the Teamsters union holds the port in its sway and the wrangle continues over owner/drivers being forced to become employees of companies. These are virtually all locked in to the Teamsters. The Agriculture Transportation Coalition says that the driver/company proposal will increase costs by $600 per forty footer.
PierPass Offpeak. Shipping lines say it has now dawned on them that PierPass has become a fixed cost that cannot be removed. And they resent it. The gate and related equipment is permanent, while many of the staff running the system at the gates cannot be fired. There were hopes, which some call naïve expectations, that PierPass might have been scaled back once the economic crash took hold, but there was no chance of that. In fact, it's quite likely that fees might be increased because revenue has fallen and expenses have risen.
Clean Truck fees. Confusing signals are coming from executives about the future. Initial pledges that they would be abolished once the vehicles are all replaced are being tempered with less definite assurances. Experience has taught commerce and industry that there has never been a levy that a bureaucrat has not liked.
Efficiency. The port is strangely silent on attempts to kick improvements in handling capacity into gear, even to the laggardly levels of the East Coast. The bland standby defense of "We are working on this very hard" produces groans of despair.
Beyond these specific concerns there is anxiety over California's radical environmental plans that ignore national regulations, epitomized by the low sulfur requirements. Carriers are wondering what's next and even though they are gung ho about cutting pollution, would prefer to deal with states that follow the federal line.
Los Angeles – and others --- is seen as needing to shed light on darker issues to be sure of staying as the conduit of choice.