The Port of Los Angeles and the Port of Long Beach are the biggest such facilities in the United States. Together, the two make up the San Pedro Bay Port Complex.
“Together, we are a massive economic engine,” said Noel Hacegaba, chief operating officer of the Port of Long Beach, during the “Ports of L.A. and Long Beach: Update on the Present and Look to the Future” panel at the ULI Fall Meeting in Los Angeles. “We process more than $500 billion in goods annually, and that translates into a lot of positive economic development.”
Hacegaba says that the San Pedro Bay Ports Complex is responsible for more than five million jobs nationwide and for one in nine jobs across the region. Cargo that moves across the docks of the complex reaches all 435 Congressional districts, making it an “asset of national significance,” according to Hacegaba.
The two ports are so vital to the national economy because they are now moving cargo at least nine days faster than goods are going through the Panama Canal, where traffic has been slowed in recent years by a severe drought.
The San Pedro Bay Ports Complex handles almost 20 million container units per year. Although that is fewer than what the ports in Shanghai and Singapore handle, experts say it is still of great impact. Hacegaba noted that the current forecast for cargo indicates the San Pedro Bay Ports Complex will be handling nearly double the current amount by 2040. However, this year has been a slow one for the Southern California ports.
“I’ve been saying since last year that 2023 was going to be a return to normal, and we’re actually tracking very closely with 2019 numbers,” Hacegaba said. “Which, again, reflects the slowing down of demand for imports. It reflects the impact of inflation and some of the concern about headwinds at the geopolitical level.”
Los Angeles City Councilman Tim McOsker, who represents the Fifteenth Council District—which includes Watts, Harbor City, Harbor Gateway, San Pedro, and Wilmington—said that Hacegaba is more optimistic than he is.
“The image you have of it being the San Pedro Bay Complex, and the Ports of L.A. and Long Beach working together well, is one that we need to keep working towards,” McOsker said. “I appreciate you very much for saying it, and I think we need to get there. We will not get to 2030 and 2035 [on] those goals without working together pretty well.”
Councilman McOsker also has concerns about the Clean Air Act demanding that the AQMD [South Coast Air Quality Management District] reduce emissions in the basin. The AQMD will then state—“not inaccurately,” McOsker said—that the two ports constitute the biggest single stationary contributor to air pollution in Southern California. AQMD is now working on rules to bring down emissions at the ports.
“The concern I have, personally,” McOsker said, “is that if we don’t have realistic, achievable milestones and goals and investments—ways to get to 2030 with zero-emissions equipment, or 2035 with zero-emissions trucks—we’re going to have this rule imposed upon the region that will say you cannot emit more than ‘X.’ We don’t know what ‘X’ is, but how do you get there if you don’t have the investment and you don’t have the equipment?”
He added that the only way is to divert cargo, which would lead to jobs being lost. Matt Schrap—CEO of the Harbor Trucking Association, which represents truckers from Long Beach to Seattle and Tacoma—said that this point is paramount.
“As goes the cargo, so [go] the jobs,” Schrap said.
There are also challenges that members of his association are currently facing—including limits on the number of hours that they can drive, and the chargers that would be needed for their trucks in the future. Schrap said current estimates point to the fact that 157,000 chargers would be necessary by 2030 for California to be able to support medium- and heavy-duty electric trucks. Peter Stone, senior vice president at Brookfield Asset Management, said that his company is looking at the dilemma at the ports holistically and trying to ascertain how an increasing amount of cargo can be moved more quickly.
“Another key point that Noel made is that velocity is a function of capacity,” Stone said. “So, the task on an investor is, how can you move more cargo through the same facility. And that’s where the opportunity lies.” He added that the issue boils down to finding ways to work smarter.
