California’s Port of Long Beach (POLB) is one of the world’s premier seaports, a gateway for trans-Pacific trade and a trailblazer in goods movement and environmental stewardship. With 175 shipping lines connecting Long Beach to 217 seaports, the POLB handles $180 billion in trade annually. The POLB is a major economic engine for the Southern California region, supporting 1 in 8 jobs in Long Beach, 300,000 jobs in Southern California and 1.4 million jobs nationwide.
As the second-busiest seaport in North America, POLB moved 7.2 million TEUs (20-foot equivalent units) in 2015 and exported more than 380,000 TEUs of recovered paper and scrap plastic in 2015, which was 14 percent of our total laden container exports. We would like to thank the recycling industry for your confidence in our port and for your business.
Containerized cargo makes up about 75 percent of total volume, but the POLB is an omniport, moving all types of cargo. In addition to six container terminals, the port complex houses eight dry bulk terminals, six liquid bulk terminals, five break bulk terminals and two roll-on/roll-off facilities.
As cargo volume grows and ship size escalates, we continue to ensure efficient movement of your cargo. We are investing $4 billion this decade to improve our infrastructure—building a new bridge, creating a fully automated, zero-emissions megaterminal and increasing on-dock rail capacity. This aggressive capital spending plan is one of the many reasons we have been named “Best American Seaport” by Asia Cargo News 18 times in the past 21 years.
Where is this $4 billion being spent? To start, POLB is building the new $1.5 billion Gerald Desmond Bridge, which will replace the current bridge. It will be 205 feet above the water, 50 feet higher than the current bridge. This will allow for megasized ships to travel underneath and reach our north harbor. It will have additional lanes in each direction, including emergency and bike lanes. The bridge is important commercially because about 15 percent of all U.S. imports travel on it. The new bridge will be completed in 2018 and will be an iconic structure for the city of Long Beach. With its towers, it will be 500 feet tall—the tallest structure in the city. It also will be the largest cable-stayed bridge west of the Mississippi River.
Our new $1.5 billion Long Beach Container Terminal (LBCT) is the world’s first all-electric, zero-emissions automated megaterminal. It is owned by Orient Overseas Container Line (OOCL) and is opening in three phases. Phase one opened in April 2016, adding 10 percent more container capacity to the POLB. In 2020, the final phase will be completed, adding another 20 percent of container capacity. Upon completion, LBCT will have the capacity to move 3.3 million TEUs per year. If this terminal were a port, it would be considered the fourth-largest port complex in the United States. In addition, LBCT will be able to handle the largest ships being built—up to 24,000 TEUs. The terminal will have 4,280 feet of berth space and 14 ship-to-shore gantry cranes and can expand to 18 cranes.
POLB also is spending $1 billion to double on-dock rail capacity. Five of our six container terminals have on-dock rail. Currently, we move about 26 percent of all our cargo on rail. Our goal is to reach 50 percent within the next 10 years. Increased use of on-dock rail will significantly relieve truck and terminal congestion and dramatically increase the speed that we move containers through the port. On-dock rail also will increase terminal capacity, allowing us to move more containers per acre on an annual basis. We can continue to grow container volumes without building costly new terminals. Moving cargo by rail is not only more efficient, saving shippers time and money, but it also reduces the impact of port operations on the environment. On average, one train at the port is the equivalent of taking 750 trucks off the road.
Why is the POLB spending so much of our resources on infrastructure? We have several reasons, but the main one is big ships. Ever-escalating ship size necessitates new strategic thinking by seaports globally. Consider these numbers: In 2015, we saw overall container volumes jump 7 percent. At the same time, the number of containers went up 54 percent, while the numbers of container ship visits were down 31 percent. This means that we receive more cargo at once, delivered on megasized ships. To stay competitive with other ports and to grow our cargo market share, we must improve our infrastructure so we can accommodate the biggest ships and move mass amounts of cargo efficiently.
How big are these megasized vessels currently arriving at berth at the POLB? In February 2016, our port welcomed the largest vessel to call on North America: the 18,000 TEU Compagnie Maritime d’Affrètement - Compagnie Générale Maritime (CMA CGM) Benjamin Franklin. This vessel is as tall as a 20-story building, as long as four football fields and as wide as a 12-lane freeway. We are a deep-water port; our main channel is 72 feet deep, and many of our berths are larger than 50 feet. We are big-ship ready!
The POLB is doing much more for our shippers, industry and communities than improving our infrastructure. As the “Green Port,” we know economic and environmental sustainability are two sides of the same coin. We continue to implement new strategies to reduce harmful pollution from the port complex and surrounding areas. Since 2005, the POLB has cut diesel particulate matter by 81 percent. In addition, nitrogen oxide emissions were down 54 percent, and sulfur oxide emissions were down 88 percent over the same period. These results, from data collected through 2012, represent six straight years of improving air quality in the harbor area. Initiatives such as the Green Flag, the Green Ship and the Clean Trucks program continue to reduce pollution for the surrounding communities.
We applaud the paper and plastic recycling industries for pushing forward your own sustainable initiatives.
In the shipping community, overcapacity of vessel space on the water is creating uncertainty and anxiety. Cargo demand has not kept up with increasing ship size. The future of shipping lines and the alliances are in flux. In April 2017, the current four shipping alliances—G6, Ocean 3, 2M and CKYHE—will become three—The Ocean Alliance (CMA CGM, American President Lines [APL], COSCO China Shipping, Evergreen and OOCL), THE Alliance (Nippon Yusen Kaisha [NYK], Kawasaki Kisen Kaisha Ltd. [K-Line], Mitsui O.S.K. Lines [MOL], Yang Ming, Hapag Lloyd) and the 2M (Maersk and Mediterranean Shipping Co. [MSC]).
While these alliances shift, we will see mergers occur. Earlier this year, COSCO and China Shipping announced a merger, and the three Japanese lines—K-Line, MOL and NYK—recently have agreed to merge. Hapax Lloyd is acquiring UASC, Maersk is purchasing Hamburg Sod and Hanjin Shipping went bankrupt. Until containerized cargo supply and demand finds its equilibrium, we will continue to see mergers and acquisitions in the shipping community.
Through all the uncertainty and challenges in the shipping community, the POLB’s value proposition remains strong. The POLB is still the shortest, fastest and most cost-effective gateway for goods moving to Asia. With both Burlington Northern Santa Fe (BNSF) and Union Pacific (UP) servicing the Southern California gateway, the POLB handles cargo from every part of the United States.
Shipping line challenges aside, POLB recognizes other issues related to the movement of cargo across the maritime supply chain. Our Supply Chain Optimization (SCO) Initiative is ongoing and continues to make the POLB more efficient operationally. With participation and input from all sectors of the supply chain, including shipping lines, shippers, truckers, railroads, labor and container terminals, the POLB is tackling issues such as chassis management and availability, terminal and truck gate issues and data sharing.
Safety and security are top priorities at the POLB. Since Sept. 11, 2001, the POLB and the other government agencies responsible for security have greatly expanded their efforts to protect the port complex and surrounding communities. The POLB takes a leadership role in the development of strategies to mitigate security risks in the port complex, working closely with multiple partners, both public and private, to plan and coordinate security measures. In February 2009, the POLB inaugurated its new, state-of-the art Joint Command and Control Center. The $21 million, 25,000-square-foot facility houses the POLB Security Division and Harbor Patrol, as well as units from other local and federal agencies. In keeping with the port’s Green Port Policy, the structure is LEED (Leadership in Energy and Environmental Design) certified, incorporating environmentally friendly design, recycled materials, energy efficiency and sustainable construction practices.
The POLB believes that, even with many challenges, our future together is big.