About Long Beach and Los Angeles Two Most Significant Ports in the Country
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Ports play an important role in the supply chains of businesses that work with international or domestic partners. They are also critical to the nation’s economy, as over 70% of cargo entering the United States arrives by ship (International Trade Administration 2018). There are many benefits that seaports bring to the economy. Not only do they create millions of jobs, they also connect agriculture, manufacturers, and consumers to the rest of the world for trade. Port operations consist of outbound and inbound activities, including the transferring of cargo to ships or different modes of transportation.
Port operations is a key driver of the U.S. economy. It creates jobs and provides goods and services to consumers and other businesses, which support local and national economic growth. With seaport cargo activities employing about 23 million people nationwide, it accounts for 26% of the nation’s economy. In 2014, it generated $4.6 trillion dollars in total economic activity and $321 billion dollars from federal, state, and local taxes (American Association of Port Authority, 2018). Ports also function as a gateway to international trade, and regulations allow that to happen. The Federal Maritime Commission (FMC) is the government body that is in charge of these regulations, and it operates under the U.S. Department of Transportation. The FMC is an independent federal agency that is incharge of regulating the US international ocean transportation system for the benefit of US exporters, importers, and consumers.
The agency can schedule taxes, approve or reject port creation/expansion, and impose fines for unauthorized activities. For example, if an individual or a corporation is caught operating at a port without a license for freight forwarding, the FMC is allowed to issue a fine to that individual or corporation not exceeding $5000 for each violation (Code of Federal Regulations, 1982). The FMC is not the only agency that is involved in American ports. Major stakeholders such as the Department of Transportation, Maritime Administration, Interstate Commerce Commission, and the Environmental Protection Agency all work together to keep the port well-regulated and operating smoothly. The city in which the port is located also plays a huge part in port operations. For example, the Port Authority in Los Angeles acts as a landlord. They build, maintain the terminal infrastructure, and provide major capital equipment, but they do not participate in operations (Bureau of Transportation Statistics, 2017).
Globally, port operations and responsibilities remain fairly uniform.When the vessel arrives at port, in needs to maneuver through narrow inlets to get to the dock. To ease the task on the pilot, a tugboat is sent to moor and berth the vessel at the dock. Once docked, the ship-to-shore container crane operator moves all of the containers off of the vessel onto yard-trucks, which transport the cargo to be stored or to the rail mounted container gantry crane, where the container can either be placed onto a train or a truck for further transportation. Containers known as TEU’s and FEU’s are used for intermodal transportation. Often, the continuance of transportation occurs through a 3pl. Since the ports of Los Angeles and Long Beach account for large amount of the nation’s imports, thus reducing their global supply chain spending. After the distribution to the warehouses or DC’s, the truck returns to port to unload the empty TEU, so a reach stacker can be used to place the container into storage. When shipping outbound, Much importance is placed on the heads of ports. Terminal operators are responsible for overseeing and optimizing the use of their equipment. (Christensen, 2018) OUTBOUND
The Ports of Long Beach and Los Angeles are the two most significant ports in the entire country. Together, they create the San Pedro Bay Complex and according to the State Economic Trade Impact Report, the ports combined are in the top 10 port rankings in the entire world and deal with over 40% of the nation’s imports and over 20% of the exports (2013). The ports also created almost $5 billion in trade-related federal taxes and over 2 million jobs in the United States (Port of Los Angeles 2018). The economic effects of the San Pedro Bay Complex is unbelievable and it is continuing to grow. The operation size for the two ports is massive when compared to other ports.
The port of Los Angeles has 43 miles of waterfront and 26 passenger and cargo terminals. This also includes 15 marinas and 86 ship-to-shore container cranes (Port of Los Angeles, 2018). In addition, the port of Long Beach has 3,520 acres of land and 4,600 acres of water while operating with 10 piers, 22 terminals, and 68 gantry cranes (Port of Long Beach, 2018). According to Inbound Logistics, the Port of Los Angeles handled over 8 million TEU’s and Long Beach dealt with over 7 million. Respectively, the two ports are expected to see 6% and 1.3% in year-over-year growth rate (2015). An interesting fact about the two ports is that there have been multiple attempts to merge them but have ended in failure. The latest attempt was in 2014, however the merge was motivated by business people rather than port administrators in an attempt to eliminate the duplication of resources and competition (Knatz, 2018). The main reasons the attempts failed was because there was no port knowledge involved in the proposition and no analysis showing benefits from the merge (Knatz, 2018).
Overall, ports have a critical role in the economy of the United States. The San Pedro Bay Complex is able to provide earnings from taxes and provide numerous jobs to local and nationwide employees. According to the Port of Los Angeles, the two ports compile 73% of the west coast’s market share and 32% of the nation’s market share. Also, the San Pedro ba Complex has undergone infrastructure construction which refers to the Green Port Gateway Railroad project.