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            september 22, 2019

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Ports of LA, Long Beach work on agreement to boost their competitiveness


The Port of Los Angeles and Port of Long Beach have been discussing ways to potentially enter into a memorandum of understanding (MoU) that would boost their competitiveness, address joint challenges and bolster their relationship.
Port of Los Angeles executive director Gene Seroka said in a presentation to the Los Angeles Harbour Commission that the goal of the MoU was to ensure the two ports "are the gateway of choice in North America", reported American Shipper.
He revealed limited details about the plan, but said the ports would discuss and undertake activities related to: service enhancements at landside transfer points, cargo transfer predictability, supply chain connectivity, workforce development, training, cyber security and metrics.
Mr Seroka said a final recommendation on the MoU from the Port of Los Angeles would be presented to its commission on September 5, giving its members the opportunity to edit it and make recommendations back to the staff.
"We feel it is pretty comprehensive when it comes to a nonbinding memorandum of understanding. It is now historic - for the first time in a generation we are taking this relationship to the next level.
"The fight is not LA versus Long Beach for that last container. It's about keeping cargo here in southern California," said Mr Seroka. "That is the battle that we face - price competitiveness, labour cost, environmental cost, regulations, etc."
The port of Los Angeles is the nation's largest container port, followed by the port of Long Beach. Mr Seroka said they must perform at a "competitive level for the folks who have a choice as to what port complex than can utilise in the United States".
The battle for this so-called "discretionary cargo" that can move through a variety of ports has heated up in recent years.
The cost of doing business in California, strict environmental regulations, the widening of the Panama Canal, the shift of more manufacturing to Southeast Asia, the increased size of containerships - these are all trends that have made all-water routings of containerised cargo to east coast and Gulf coast ports more appealing.
Contentious labour negotiations between the International Longshore and Warehouse Union (ILWU) and management that have resulted in periodic shutdowns at west coast ports have prompted some shippers to move more cargo through other ports.
British Columbia ports such as Vancouver and Prince Rupert have seen strong growth in US-bound cargo from Asia as well as US exports, and more companies are adopting strategies to move cargo through multiple ports in order to make their supply chains more resilient.
According to US Department of Commerce figures, the share of East Asia cargo moving through the combined ports of Los Angeles and Long Beach dropped to 45.4 per cent, as measured by weight, last year from 57.4 per cent in 2003. By value, that cargo decreased over the same period to 53.5 per cent from 63.2 per cent.
Mr Seroka noted that the two adjacent ports have worked together since 2013 under a Federal Maritime Commission agreement aimed at establishing and implementing programmes and strategies to: improve port-related transportation infrastructure; increase cargo movement efficiencies and port capacities; improve safety and security; and decrease port-related air pollution.
He also pointed out that the two ports have worked together closely on security along with the Coast Guard and the MoU will help them continue to find ways to optimise work of first responders, security personnel and those who work in the cybersecurity area.
"It's about finding efficiencies in the work effort" and eliminating duplicate work, he said.

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