Ride Captain Ride: Unlocking the value of seaports
Oct 23, 2023
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The Executive Director of the Port of Los Angeles and a representative from South Carolina Ports discuss the impact of the pandemic on seaports and the resurgence of trade activity. They explore strategies to alleviate congestion, the fluctuations in shipping container costs, challenges of finding land near ports, and the importance of workforce in the shipping industry. The podcast also touches on the changing manufacturing landscape in the US and upcoming episodes on data centers and disruptive entrepreneurship.
During the pandemic, ports faced congestion but implemented strategies like fine levies and collaboration with terminal operators to alleviate congestion and expedite cargo movement.
Inland ports play a significant role in the supply chain by providing gateways for importers and exporters, enabling faster transit and reducing congestion at seaports.
Deep dives
Overview of Ports during the Pandemic
During the pandemic, ports faced congestion and disruptions in global supply chains due to increased cargo demand. The Port of Los Angeles experienced a drop in cargo followed by a surge in American consumer buying, resulting in a backlog of ships waiting to unload. The port implemented strategies like fine levies and collaboration with terminal operators to alleviate congestion and expedite cargo movement. The South Carolina Ports Authority tackled congestion by investing in chassis and altering berth practices. As a result, both ports have seen a resurgence of exports and are currently handling more goods.
The Role of Inland Ports and Interconnectivity
Inland ports play a significant role in the supply chain by providing gateways for importers and exporters, enabling faster transit and reducing congestion at seaports. In the Southeast, inland ports have been successful in achieving rail lifts and connecting areas with significant populations to seaports. The interconnectivity between ships, rail, and trucks is crucial in moving cargo efficiently. The West Coast ports, with their extensive warehousing and logistics facilities, have the challenge of finding land for expansion, while the Southeast benefits from ample port-dependent land, allowing for substantial economic development.
The Impact of Manufacturing Shifts on Shipping
The United States is experiencing a manufacturing resurgence, particularly in industries like chip and battery manufacturing and auto manufacturing. This shift in manufacturing locations impacts shipping and logistics, as industrial clusters emerge near ports. Large industrial clusters, powered by data centers, distribution centers, and manufacturing facilities, are being developed close to areas with power, water, and a growing population. The demand for land and the need for infrastructure to support these clusters pose challenges for logistics and warehouse operators.
Labor Challenges and Future Trends
Labor issues have been a significant challenge in the shipping industry, with strikes and negotiations impacting ports and supply chains. However, the focus on labor has increased awareness of the importance of the industry and led to generational investments in infrastructure and processes. The introduction of technology aims to augment the workforce, improving safety and productivity. Trends for the future include the adoption of EV trucks, hydrogen trucks, and the development of EV charging stations. Additionally, collaboration between ports, government agencies, and industry stakeholders is critical for continued growth and success.
The leaders of two of America’s key seaports—Gene Seroka of the Port of Los Angeles and Barbara Melvin of South Carolina Ports—discuss lessons learned from the pandemic and what resurgent trade activity augurs for supply chains and industrial & logistics real estate investors and occupiers.
ABOUT THIS WEEK'S GUESTS
GENE SEROKA is the Executive Director of the Port of Los Angeles, the busiest container port in North America. Confirmed by Los Angeles City Council in June 2014, the Port has experienced a series of historic, record-breaking performances since his appointment. Since the pandemic-induced buying surge generated by American consumers in the second half of 2020, the Port of Los Angeles has eclipsed multiple monthly cargo records and recorded eight out of 10 highest-performing quarters in its 115-year history. The Port set two new milestones for the Western Hemisphere in June 2021 as the first port to process 10 million Twenty-Foot Equivalent Units (TEUs) in a 12-month period and in May 2021 the first port to process 1 million TEUs in a single month. Seroka received the esteemed Stanley T. Olafson Award from the Los Angeles Area Chamber of Commerce in 2023, recognizing his work in the world trade industry and leadership of the nation’s busiest container port.
BARBARA MELVIN is the sixth leader in the history of the port and the first woman to lead a top 10 U.S. operating container port. During her more than 20 years with SC Ports, Melvin has held several senior leadership positions, including senior vice president of operations and terminals; senior vice president of external affairs; and vice president of government relations. In addition to overseeing numerous infrastructure projects, Melvin served as the lead staff person on the Charleston Harbor Deepening Project, which is on track to being the deepest harbor on the East Coast at 52 feet this year.
Commercial Real Estate insights at https://www.cbre.com/TheWeeklyTake
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