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Feb.09, 2015

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INTERNATIONAL MARITIME IMPORTING | EXPORTING | PORTS | CARRIERS | BREAKBULK | GLOBAL LOGISTICS 32 THE JOURNAL OF COMMERCE www.joc.com FEBRUARY 9.2015 By Bill Mongelluzzo CALIFORNIA PORTS WILL face even greater challenges after the International Long- shore and Warehouse Union contract negotiations are over and productivity has returned to normal, according to the CEOs at the state's container ports. "These are systemic problems," Port of Long Beach CEO Jon Slangerup told the annual conference of the California Truck- ing Association in Monterey, California, last month. "Labor is frustrating it, but the entire system is fragmented, inefficient and silo-driven." Slangerup was joined by Gene Seroka, executive director of the Port of Los Ange- les, and Chris Lytle, executive director of the Port of Oakland, in calling for a new operating model for California's ports, which together handle about 40 percent of U.S. containerized cargo, to deal with an onslaught of big container ships, adjust to powerful new carrier alliances and establish a new chassis regime. The old days of being landlord ports that build container facilities, collect rent and let terminal operators make all of the operating decisions are over. Seroka sees California's ports adopting a hybrid model in which they will position themselves somewhere between the landlord ports they used to be and the operating ports that are prevalent today in the South Atlantic. The ports must work closely with carrier alliances, terminal operators, truck- ing companies, railroads and cargo interests to improve efficiency. At times, the new model will require ports to incentivize sup- ply chain efficiencies, Seroka said. Big ports are in a unique position in which they can use their tariffs to offer financial incentives, or impose financial disincentives, to improve terminal efficiency and drive cargo velocity, Slangerup added. The new model the port directors talked about will be built around information technology and managing data to connect overseas vessel stowage offices, shipping lines, marine terminals, freight intermedi- aries, truckers and railroads in a single loop. This interconnectedness is crucial in handling the big ships carriers will continue to deploy in the trans-Pacific trades, Lytle NO EASY ANSWERS California ports urged to adopt a new model of operation to fix 'systemic' problems "These are systemic problems. Labor is frustrating it, but the entire system is fragmented, inefficient and silo-driven."

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