U.S. West Coast ports warned about “complacency”

When the American Association of Port Authorities (AAPA) staged its port commissioners conference in San Francisco earlier this summer, attendees were keen on learning how to avoid being caught up in escalating policy disputes and high stakes disagreements—particularly on the U.S. West Coast.

John McLaurin, president of the Pacific Merchant Shipping Association, told them that there was a short answer to this challenge: “Conflict is now the nature of the beast.”

But before commissioners conclude that the situation is hopeless, he adds, they must understand what’s wrong right now, and what must change to ensure ports are economic engines rather than political pawns, or worse yet…political causalities. 

McLauren points out that port commissioners in California and Washington are either appointed by a local mayor or elected to office. In addition, ports are hybrid creatures on multiple levels—local public entities essentially operating as businesses in a global competitive environment overseen by a governance structure that is inherently political. 

“And at least in California, port authorities and their commissioners can also have conflicting responsibilities and priorities given that they’re local public agencies with local interests while also serving as trustees on behalf of the state of California,” says McLauren. 

In past years, the state provided port commissioners with protection to take positions that might have been counter to the wishes of local government. Today, only tattered vestiges of those policies remain. 

“Instead of being viewed as trade gateways whose benefits go far beyond the confines of the port, the role of some ports is being reduced to the immediate gratification of cash transfers to the local city partner,” McLaurin says. 

Often ignored or forgotten by local political or state entities is the fact that ports are part of an international goods movement system. Local or state actions and policy decisions affecting the ports can have ramifications on a worldwide basis. 

“And layered over these conflicting responsibilities, port politics have become vicious and personal,” says McLauren. “In recent years, some port commissioners were either removed or voluntarily left office because they refused to bend to the political will of those that placed them in office. In other situations, the trade community has witnessed very public disputes and feuds between commissioners.”

And the stakes are high for U.S. West Coast cargo gateways, which have been steadily losing market share in North America.

As noted in recent LM blog posts, there are several factors involved in this trend, ranging from a change in where goods are manufactured overseas to availability of alternative ports unburdened by labor strife. Exacerbating this situation are the increased costs due to regional environmental regulatory requirements and the absence of support by state and local officials. McLauren characterizes this as “an overlay of arrogance” that cargo must come through West Coast ports.

Hopefully the situation is not that dire if ports elevate their image and stay on message, industry experts agree. America’s two largest ocean cargo gateways in San Pedro Bay will be given a very public forum this month to deliver their value propositions when they speak at USC’s 7thAnnual Global Supply Chain Excellence Summit. 

Gene Seroka, executive director of the Port of Los Angeles and Noel Hacegaba, managing director of the Port of Long Beach, will be the featured keynoters charged with explaining how they can offer operational advice in order to improve cargo flow.

McLauren advises them to look at the entire supply chain—not just the politically expedient partners – or rely on anecdotal feedback from one segment of the supply chain. “Effective logistical solutions are the collective responsibility of all,” he concludes.