Port of Long Beach Ready For Panama Canal Challenge Geography, modernization program key to value proposition

Port of Long Beach Ready For Panama Canal Challenge Geography, modernization program key to value proposition

It’s a question I hear a lot as CEO of the Port of Long Beach: Are we worried about the expanded Panama Canal taking our business?

The short answer is no. You see, for all the work we put into making sure our facilities are modernizing — and we’re in the middle of a $4 billion capital improvement program to do just that — we also have a natural asset that makes us a great value for our customers in Asia. I’m talking about geography.

A typical shipment sent from the Far East to Chicago via Long Beach arrives as many as 11 days sooner than if it’s routed through the Panama Canal. When it comes to cargo sent through the Suez Canal to the U.S. East Coast, we have a 17-day advantage.

Ocean carriers are consolidating. Freight rates are falling because of the stagnant economies in China and Europe. So vessel operators are cutting costs, seeking economies of scale. Simply put, they’re looking at moving more cargo with fewer, bigger ships. Here again, Long Beach is well positioned.

Ships larger than 13,000-TEU won’t fit through the expanded Panama Canal, partly because no one foresaw vessel size would grow this much, this quickly. And it isn’t clear that our East or Gulf Coast competitors can regularly handle even 10,000-TEU ships. The Port of Long Beach has been handling ships of 14,000 TEUs or greater since 2012, and this year, an 18,000-TEU ship arrived. Soon, we’ll be ready for even bigger ships.

In April, our partner Long Beach Container Terminal opened the first phase of Middle Harbor, the world’s most advanced and environmentally-sustainable container terminal. It can accommodate an 18,000-TEU ship fully loaded. When the final phase of the facility comes online in 2020, it will be able to host 24,000 TEU ships.

Still, we know other North American ports want our business and we need to stay competitive. Middle Harbor is part of the modernization I referenced, and it’s the most aggressive program of any port in the country.

It includes a new $1.5 billion bridge that will carry 15 percent of U.S. cargo imports and is tall enough for the newest megaships to pass underneath. We’re also spending over $1 billion to expand from 30 percent to more than 50 percent on-dock rail capacity, increasing speed to market while improving air quality and removing one million-plus truck trips from roadways.

Which brings me to my last point. The future of goods movement is green, and like our infrastructure, we outpace any competitor following our trail.

The Port of Long Beach is a leader in technological and operational trends. We partner with our tenants to be more sustainable through initiatives like our Energy Efficiency Rebate Match Program, which offers a subsidy to replace old equipment with modern, cleaner versions. And we seed technology like the Advanced Maritime Emissions Control System. This alternative to shore power, which we also pioneered, fits over the exhaust stack of vessels to “scrub” pollution.

We’re leveraging all of these assets every day to build the Green Port of the Future in Long Beach. Thanks for making us your gateway of choice, and here’s to a successful peak season to all of you.