Mario Cordero has an eye on the near term and another on the long term as he steers the Port of Long Beach into the future.
Cordero, who is executive director of the Southern California port, oversaw a facility that handled 9.4 million twenty-foot equivalent units (TEUs) last year, marking a record that reflected a 15.7 percent increase from 2020 levels. However, he’s not resting on his laurels with the war in Ukraine and Covid-19 concerns in China creating uncertainties in the current operating environment, while he and the rest of the team think long with multi-year rail projects and sustainability targets set.
“I’m very proud of the fact that our men and women at the docks at the end of the day, despite the congestion and bottlenecks and uncertainties, one fact is evident: we have moved the cargo here,” Cordero said, adding the performance also includes the neighboring Port of Los Angeles.
He pointed to the 2025 forecast of 24.5 million containers across the San Pedro Bay ports. The 2030 forecast is 38 million and both estimates, Cordero said, are on the conservative side.
“What’s paramount here is moving cargo and that’s why I’ve been consistent in terms of addressing the operational modes of how we do that,” he said.
The Port of Long Beach reached its air emissions targets for 2023 early, with goals encompassing diesel particulate matter, nitrogen oxides and sulfur oxides. Up next is bringing its truck fleet to zero emissions by 2035 and terminal equipment, such as cranes, to zero emissions by 2030.
“We have a strong resume on sustainability, whether it’s air emissions and our current goals of zero emissions and transportation as it relates to trucks,” Cordero said.
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Greening operations is one of the reasons the Port of Long Beach is investing in rail over the next decade in a bid to lessen the amount of congestion from trucks on heavily traveled goods movement corridors.
Last week marked the completion of a second rail line running between piers G and J. The Pier B on-dock rail facility was approved last month by the U.S. Maritime Administration, with a groundbreaking expected sometime next summer.
The Pier B project is expected to be completed in 2032. However, Cordero said it is being fast tracked and could wrap up a year earlier.
Progress on the sustainability front is one way Long Beach can sell its competitive advantage, particularly as conversations around sustainable development and climate change policies ramp.
Progress as it relates to rail is also part of Long Beach’s competitive advantage story. While rail is seen as a cleaner way to move goods, it’s also a way to move goods faster from the port. The latter is particularly important as it relates to serving markets beyond the immediate region and into places such as the Midwest.
The expanding capacity of mega container ships has occurred alongside the expanding length of trains, Cordero said.
“To create more efficiency and fluidity, we have to have this type of rail facility so the connectivity to the Midwest is not only amplified, but moves cargo in terms of a more expedient manner than we are at the current time,” Cordero said.
Creating efficiencies is also the thought with the Supply Chain Information Highway. The digital tool, which soft launched in February, aims to share cargo-tracking data across transportation modes.
“Digital transformation has certainly over the last several years been elevated, whether at various sectors of the supply chain, the railroads, the carriers, the marine terminal operators. And, hence, everyone’s going to have their own technology that they believe is going to be important to their particular business or platform,” Cordero said. “So, for the Port of Long Beach, what we are providing is a systems approach in which you are able to put in data and get data out of the system as you believe is appropriate and meets your business needs. I’m very confident that this is the best approach.”
Since the launch, the Port of Oakland and the Northwest Seaport Alliance, a partnership between the ports of Seattle and Tacoma, have signed on to be part of the Supply Chain Information Highway. Cordero said Long Beach is now in talks with more ports to be part of the information sharing tool.
“I certainly welcome the ongoing development of technology because, at the end of the day, the supply chain is quite complex and there’s a number of sectors that are involved to make the supply chain as resilient as we can, and it’s going to take a collaborative effort to all work together. There’s not a one-size-fits all solution,” Cordero said.
New technologies have blossomed in more recent years and, in particular, have underscored areas of improvement over the past two years with pressures placed on supply chains globally.
Cordero said he expects some semblance of normalization to occur in the third or fourth quarter, stressing the economic recovery in the United States going back to the summer of 2020 and healthy consumer demand.
“I think certainly if you asked that question a year ago, people were looking to 2022 as a period of time where we’d have supply chain normalization,” he said. “I think what has been challenging is the root cause of the disruption, which is Covid. So, I think it’s all dependent on the trajectory of how we control the virus in the global arena and I say that only because look at what we’re seeing today, the supply chain chaos in China because of the omicron variant. Now, obviously, what has added to that was China’s zero-Covid policy. So, in summation, the better we are in controlling the virus in the global arena, the more optimism we will have in terms of the supply chain getting to some form of normalization.”
The lockdowns that have been implemented in parts of China will have implications for the Port of Long Beach and others into the future, with Cordero and other stakeholders carefully monitoring the situation.
“While the ports in China have not been closed down, clearly the supply chain there has either been on a slowdown or a lockdown,” he said. “So, at the end of the day, what does that mean? There’s less cargo being loaded onto vessels to come to the West Coast or United States. So whatever percentile that may be, if you want to call it a 5 percent reduction or 10 percent reduction, that’s going to be made up in the weeks or months to come. So, are we going to witness another import surge? My answer to that is yes.”
The war in Ukraine is another area of uncertainty Cordero’s closely watching.
“A year ago, who would have thought we were going to have this conflict with Ukraine and Russia, which, again, that’s bound to have an impact on the global supply chain as we have seen,” the executive said when asked what keeps him up at night. “So, I think the continued uncertainty, not only with regard to Covid issues but also with regard to the geopolitical conflict, remains.”