Port of Long Beach poised for growth, Cordero says
2/7/2023
By Grace Renderman, Associate Editor
Port of Long Beach Executive Director Mario Cordero is bullish on his port’s growth prospects, and he and his team are planning accordingly.
In 2022, Long Beach had its second-best year ever in terms of cargo volume, logging 9.13 million 20-foot equivalent units (TEUs) in 2022, down 2.7% from the previous year’s total, even though West Coast ports last year lost market share to East Coast and Gulf of Mexico ports. Lengthy contract negotiations with dockworkers have led some shippers to shift cargo away from Long Beach and other ports.
The share loss is a short-term blip, Cordero believes. Over the next decade, the port will invest $2.6 billion in a variety of projects to increase productivity, expand capacity and upgrade efficiency. The federal government is also pitching in with plenty of grant funds to accomplish both short- and long-term goals, including a $52.3 million grant from the U.S. Maritime Administration to build the Pier B On-Dock Rail Facility, which will support the port’s on-dock rail system.
Improving Long Beach's rail network is the main focus of the capital improvement program, Cordero says. The port is served by Pacific Harbor Line Inc., a subsidiary of Anacostia Rail Holdings Co.
Sustainability also continues to be a key component to the port’s long-term strategic plan as "building for the future” has become Long Beach’s go-to mantra, Cordero says. Under the new Zero Emissions, Energy Resilient Operations program, introduced during the State of the Port address in January, the port plans to invest in projects aimed at reducing the impact of operations and improving air quality.
For an update on the port’s project (and other) plans, RailPrime last week reached out to Cordero. His emailed responses follow.
RailPrime Contract negotiations with West Coast dockworkers have been ongoing since May 2022. Has the lack of agreement affected the port’s business?
Cordero: Our operations continue without disruption as the International Longshore and Warehouse Union and the Pacific Maritime Association work toward an agreement. There will be a resolution, hopefully in the near term.
It’s important to note that we are coming off of our second-busiest year of all time. We have seen robust activity. At the same time, it’s clear some cargo owners are choosing to send some of their discretionary cargo to the East and Gulf coasts while the parties negotiate.
RailPrime How do you plan to recapture the market share Long Beach lost to the Gulf and East Coast ports in 2022?
Cordero: We expect some of the cargo that has shifted during labor talks to naturally return. That’s something we saw during previous contract negotiations.
Additionally, the Port of Long Beach is constantly adapting to the needs of our customers and showing potential customers why we are the best gateway for transpacific trade. Over the next 10 years, we are investing $2.6 billion in strategic projects to enhance marine terminal productivity, deliver greater efficiency to our customers and improve the sustainability of our operations.
Building for the future, whether it’s big ships or zero emissions operations, has been a mantra for us that has helped us double our cargo volumes over the last 20 years, and it’s key to our success in the decades ahead.
RailPrime What are your 2023 cargo projections?
Cordero: The cargo volume we handle is always a reflection of the economy, and in America, the backbone of that is consumer spending. Many economists expect economic growth to be sluggish in 2023.
We expect cargo volumes to rebound somewhat as U.S. inventories drawdown and factories in China return from the Lunar New Year break.
RailPrime Are any major infrastructure projects at the port being funded by the IIJA or other federal/state funds?
Cordero: Historically, many of the projects at the Port of Long Beach receive federal or state funding. Trade at this port reaches every congressional district. We are thankful that our partners at other levels of government recognize our contribution to the economy.
In October, the U.S. Department of Transportation awarded $30.1 million in Port Infrastructure Development Program funds to deploy the nation's largest fleet of human-operated, zero-emissions cargo handling equipment at the Long Beach Container Terminal. It's the largest fleet of its kind at a single marine terminal. The project will replace diesel yard tractors at the terminal with approximately 60 electric yard tractors. The project also includes construction of electric equipment charging stations with energy efficiency-enhancing software, training for operators and maintenance personnel and installation of software equipment to streamline cargo-handling operations within the terminal.
The biggest investments this decade will be improvements to our rail system to make it possible for a greater share of the cargo moving through this port via on-dock rail. The centerpiece project, the Pier B On-Dock Rail Facility, received a $52.3 million grant from the U.S. Maritime Administration (MARAD). This was the largest award to a port authority from MARAD’s Port Infrastructure Development Program. The $1.567 billion Pier B project will provide our terminals with a facility where they can send smaller segments to join into full-sized trains, increasing velocity of cargo and eliminating approximately 7.3 million truck trips.
We’re also undertaking a joint project with the federal government to deepen channels at the Port of Long Beach to make navigation safer and more efficient. We’ll share the estimated $200 million cost with the federal government. A study by the U.S. Army Corps of Engineers found the value of jobs and economic activity the project is expected to generate over 50 years is more than triple the original investment.
RailPrime How important is rail to the port’s overall operations?
Cordero: Improving our rail network, specifically on-dock rail, is now the focus of our capital improvement program. It's a crucial tool to maximize terminal space, speeding movement of cargo through the harbor and allowing terminals handling the biggest ships to move cargo faster.
In addition to the Pier B On-Dock Rail Facility project, the recently completed $35 million Pier G-J Double Track Access project adds a second rail line between Piers G and J — about 8,000 feet long — to facilitate on-dock rail. Construction of the $25 million Fourth Track at Ocean Boulevard project has begun and will add another line to a crucial rail route at the port. Finally, the $40 million Terminal Island Wye Realignment project will reduce switching conflicts by adding a new lead track on Pier T and two new storage tracks on Pier S. Construction for that project is scheduled to start in late 2023.
