Environment Trumps Growth and Development

J. Christopher Lytle, Deputy Executive Director and CEO of Port of Long Beach (PoLB) said at today's Transportation Club of Tacoma that environmental challenges trump container volume growth or infrastructure development.

Lytle, well traveled among international lines, including some time in Tacoma, spoke of the overriding concerns the Port of Long Beach had with its future development. Their priorities are of no small import (pun intended) given their prominence as a premier port on the West Coast. Begun in 1911, the PoLB is now the 2nd busiest U.S. port, and the 16th busiest in the world. It has 3,600 A., 7 container terminals, 72 cranes. 82% of its revenue comes from containers. Along with 70 million tons of bulk cargoes, the port handles 7.3 million TEUs (twenty-foot equivalent units). That represents $140 billion in cargo value. For the future, the forecast is that containers at PoLB will increase from 15.7 million in 2007 to 42.7 million TEUs by 2030.

Lytle said projects aren't getting done because of environmental issues, and air quality is the top issue of the top environmental issues. In 2005, the PoLB adopted its Green Port Policy, and in 2006, its Clean Air Action Plan, along with its regional partners including the Port of Los Angeles (PoLA). Among its goals, reducing San Pedro Bay pollution by 45% within 5 years, cleaning up trucks and equipment, adopting shore-side electricity and low-sulfur fuels.

PoLB recognizes that vessels are 50% of its problem with trucks 25%. To accomplish these goals, the PoLB has adopted an incentive plan to encourage vessels to reduce speed, and 90% of lines have complied to get reductions in fees. The port has also instituted green leases, a new locomotive fleet and low-sulfur fuel incentives. (The PoLB will pay the difference between low-sulfur and other diesel fuels, a $10 million expense.) The port has even partnered with others in funding a hybrid tug!

Lytle also said the PoLB expects its lines to be good community partners. (I suggest joining the Chamber.) He gave examples of OOCL donating $140,000 ($100,000 to an ADA-park; $40,000 for school computers) and Hyundai $100,000 (for a local high school).

To address that 25% of the problem that are trucks, the PoLB has instituted an incentive program to remove all pre-2007 trucks by 2012, to replace dirty diesel within 5 years, and to use a TEU fee to refinance/retrofit truck replacement/participation loans.

He was questioned about the move to convert truck owners/operators to employees. He said the PoLB and the PoLA have different philosophies. The PoLA is supporting the change in the economic model for owners/operators becoming employees of truck lines. The PoLB believes the users of truck services should have choice as part of their economic model. He did agree the old model is broken, and spoke of the concession agreement of providing $150/company or $100/truck for the replacement program. A link quid pro quo is required that truckers meet all federal standards, truck maintenance and NO STREET PARKING that upsets the neighbors. Lytle did clarify that owners/operators would be subsidized with $1,400, splitting 50% each, with the revenue source as the TEU fee (paid by the beneficial cargo owner). And finally, that trucking fees must go up - significantly.

A final question to Lytle was concerning the nature of container fees. While he saw no reason such fees couldn't be used here - (he's been gone too long) - several in the audience quickly explained to him the nature of discretionary cargo (low metro population) and close international competition (Vancouver and Prince Rupert).