...while Long Beach glosses over realities
The State of the Port speech turns out to be something of a cheerleading exercise
Long Beach executive director Chris Lytle took a “rah, rah” approach in the annual State of the Port speech today.
Those looking for clues about strategic planning were disappointed, with the theme being one of congratulations to all and sundry at the port. So much so that some members of the audience probably needed to bandage their hands afterwards because they had to applaud so often.
Port police, a new security chief, Jacobsen pilots all got a huge hand.
And the big news of Mediterranean signing up (a leasehold at Pier T) is not that big after all. The industry knew it was coming, following CMA CGM taking a stake in Pier J terminal a couple of months back. Both of them already have stakes in terminal operations. (Hot tip – within the next year LA will announce an even bigger signing.)
The reason for their greater involvement is not so much a sudden bet that Long Beach is a dynamic force for the future, but a case of bet hedging.
On one side of the hedge is Panama and on the other, Suez. The hedge between them is the West Coast ports. None of them is ideal, with Suez just a tad long to be the sole channel, and plagued by political instability. Until now it was Somali pirates, but Egypt has been plunged into chaos. Panama’s fee schedule is a source of uncertainty, while the new locks will only take 10,000 TEU vessels at a time when the industry is fixed on bigger being better.
And the West Coast hedge is weak. As we all know, productivity is woeful for all the obvious reasons, while the rail journey across country needs to be improved.
Which brings us back to Christopher Lytle’s speech. Among those he lauded for doing a great job were the two local chapters of the ILWU. Apparently, crane moves of less than 30 an hour plus manning density per TEU and crane at least double that of Western Europe, Hong Kong and Singapore are something to be proud of.
So too is the increasing propensity of the ILWU to jump into strikes and refusal to cross picket lines.
From abroad, Long Beach, and the West Coast generally, is seen as something of a dinosaur left behind by a fast-moving world.
CMA CGM and Mediterranean have no other choice.
There is also some grumbling among carriers about Jacobsen because of what is perceived as the sometimes seamless tie up with the port, coupled with lack of communication between the two groups about tariffs and services.
Mr Lytle did not get completely carried away in extolling the port’s achievements. He noted that Prince Rupert (which has just announced a record year), Mexico and the East Coast are all clamoring to take away business.