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Port upgrades urged to keep pace with Panama Canal expansion

Despite current upgrades, officials fear that other facilities will siphon off cargo traffic once two new canal locks are finished.

February 22, 2013|By Ricardo Lopez, Los Angeles Times
  • Trucks line up at the Port of Los Angeles. Some work is underway but officials are calling for major upgrades before the Panama Canal expansion is finished.
Trucks line up at the Port of Los Angeles. Some work is underway but officials… (Al Seib, Los Angeles Times )

Port and city officials have called for expediting planned upgrades at the ports of Los Angeles and Long Beach to stave off the threat of losing cargo traffic when the $5.25-billion Panama Canal expansion is completed next year.

At a hearing Friday at Los Angeles City Hall, state officials heard testimony from trade economists, shipping line representatives and labor groups on how the state can promote the ports so they keep their share of U.S. cargo traffic, which harbors on the East and Gulf coasts are eager to lure away.

The two seaports, the largest in the U.S., currently receive about 40% of the nation's cargo traffic.

But as construction nears completion on two new Panama Canal locks that will be able to accommodate massive cargo vessels, Southern California officials are increasingly worried about the effect on the state economy — namely the loss of logistics jobs. An estimated 640,000 people work in trade-related jobs in Southern California.

A coalition of labor, business and government estimates that the ports could lose up to 25% of their cargo traffic when the canal upgrade is completed. Trade economists, however, say it's too early to make any reliable estimates on the economic effect on the state.

Nonetheless, the San Pedro Bay ports have been furiously upgrading facilities, focusing on expanding rail access that would more efficiently move goods and deepening the bay to accommodate larger vessels. There are $6 billion worth of upgrades planned for the ports.

Among those testifying Friday was Daniel Miranda, president of the International Longshore and Warehouse Union Local 94, based in San Pedro.

Miranda testified that planned upgrades, such as the construction underway now at the Gerald Desmond Bridge, have taken years to approve. Meanwhile, their Chinese counterparts have built major infrastructure projects aimed at improving the movement of goods in a fraction of the time.

It took "five years to get a bridge pushed through," Miranda said. "We need your help in helping us expedite the completion of these projects. The process is unbelievably slow."

Many of those who testified said the state should streamline approval processes to ensure that the ports stay competitive. Other ports in the U.S., Canada and Mexico have been aggressively expanding as well.

The American Assn. of Port Authorities said U.S. ports are pumping $46 billion into upgrades to boost cargo traffic. The Port of Baltimore, for instance, recently installed four massive cranes — worth $40 million — to load and unload cargo from larger ships.

Absent from the panel were environmental groups and civic groups, which have in the past raised concerns over pollution and increased truck traffic because of construction at the ports.

Despite the construction binge, international trade experts testified that it's impossible to know what the effect of the Panama Canal expansion may be, but that it is better for Southern California ports to be ready rather than stand by idly.

"We can anticipate some diversion but the true extent of it is up in the air," trade economist Jock O'Connell said.

Trade patterns could shift. Companies may choose to unload goods at West Coast ports, moving cargo by rail, rather than tack on longer sailing time by passing through the Panama Canal. Also unknown is the cost of the tolls set by Panama Canal authorities.

State Sen. Curren Price (D-Los Angeles), who heads the Senate Committee on Business, Professions and Economic Development, said the state needs a strong strategy to promote the ports.

"The bottom line is jobs, jobs, jobs," he said Friday.

Price has introduced SB 592, which would direct the Governor's Office of Business and Economic Development to address port activity and promotion as part of its strategy submitted to the state Legislature in 2014.

ricardo.lopez2@latimes.com

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