Logistically Speaking with Mario Cordero 

(0:00 – 0:37)

My name is Scott Case. I’m Cameron Roberts, and this is Logistically Speaking. Sir, TPM is nearly upon us.

Can you believe we’re already at the end of February? It’s racing along and with every executive order, it seems faster and faster. I remember the good old days where you get an executive order every couple of days instead of like a couple a day. And they would always be pertinent to other people seemingly than us, but yet there are no shortage of things to have to parse through, whether it be tariffs or agency realignments or staffing realignments.

(0:38 – 1:01)

It’s definitely going to continue to prove interesting. Well, I’ve rarely seen law firms track executive orders through a screen matrix like we’re doing now. We’re actively, as these orders come out and the troublesome part is not just the orders, of course, because the orders would be relatively easy to follow.

(1:01 – 1:19)

But now you have what gets published on various press conferences like the auto industry 25 percent tariff. There’s no executive order on that. It’s just what the president happened to say in the middle of a press conference when asked.

(1:20 – 1:43)

So, what is the source? What is the reality? What is happening is a very fluid situation, and that’s continuing to add to the pace. And I think that’s something that you and I have kind of talked about. And we were I mean, just as a company, we were on station for the day of his inauguration because he’d been he’d been promising the tariffs in the lead up to that.

(1:43 – 1:56)

And then it was quiet. And then the first thing that we got was was the Columbia maybe, maybe not. And then after that, obviously, came the came 72 hours worth of warning for Canada, China and the US.

(1:56 – 2:16)

I think since we last spoke, here comes de minimis, there goes de minimis. I think there’s just the realization that it that it couldn’t be managed is is something that came home. I mean, we we saw the Postal Service say that they were not going to accept packages from Hong Kong and China for about a hot second and then realize kind of what the implication and the backlog of that would be and pulled off of that.

(2:16 – 2:26)

And as a result, it’s it’s really been a fluid situation. And you’re right, the the matrix tracking. The thing that’s interesting is that that all of these things are sort of happening.

(2:26 – 2:46)

It’s like steel and aluminum at a percentage. IEPA at a percentage, the reciprocal idea, trying to trying to equalize what other countries charge and potentially VAT and GST. I can’t tell at what point these become sort of a compounding effect, if any, or if it’s one or the other.

(2:46 – 3:28)

I just know that the the challenge to the trade, obviously, is is trying to figure out what does this mean for their landed costs? And is there anything they can do legally regarding valuation to try and mitigate it? Does it necessitate sort of a change in in going back to the good old days of a of a traditional distribution system? If we think that that what’s driven e-commerce and that’s a genie that’s gotten out of the bottle, does or doesn’t change. And ultimately, what do these numbers look like? And you and I remember back from the 2016, 2017 period with a lot of the bonds and the bond stacking and importers having to come up with collateral for these things. It just the the uncertainty, I think, is really sort of what it is.

(3:28 – 3:34)

I think people can wake up customs brokers and freight forwarders. The boxes are going to move. The entries are going to be filed.

(3:34 – 3:51)

The programmers are going to program. So what whatever happens to be the rule of the day, obviously, the systems are going to send off to CBP. But just for the people that are having to write the checks for these things and to ask their clients how much to pay for it, that’s that’s what’s got people on edge, I would believe.

(3:51 – 4:47)

Well, and I think that’s where having the consistency of a solid infrastructure comes into place and where you’re going to be able to bring your goods in and distribute them, which actually I think is an ideal opportunity to pivot to our guest. Mario Cadero is here from the Port of Long Beach, and, you know, it’s that infrastructure element that really is going to be the bellwether of how you dict and plan your logistics future, who has the warehousing, who has the rail, who has the air, who has the population center where you’re going to have the immediate ability to service a large market, but then also distribute to your customers. To other secondary and third tier markets throughout the Western United States, if you’re on the Pacific Rim, and I can think of no one else who knows more about that than our guests today.

(4:48 – 5:09)

We’re fortunate today to have as our guest Mario Cordero. Mario is the chief executive officer of the Port of Long Beach and has held that position since twenty seventeen. Mario’s career in Long Beach began as a member, vice president and president of the Long Beach Board of Harbors Commission before being tapped by President Obama in twenty eleven to serve as a Democratic Commissioner at the Federal Maritime Commission.

(5:10 – 5:36)

He served until twenty seventeen, excluding as the agency’s chairman from twenty thirteen onwards when he left after being appointed CEO of the Port of Long Beach. We’ll explore the Port of Long Beach’s impressive trade figures, which contributes significantly to its status as part of the largest container trade gateway in the United States. The port, along with its neighbor, the Port of Los Angeles, handles trade valued at two hundred billion dollars annually and supports two point six million jobs across the nation.

(5:37 – 5:59)

Crucially, the port supports more than five hundred and seventy five thousand jobs in Southern California and more than fifty thousand or one in five in Long Beach alone. Along with trade and tariffs, we’ll spend some time focusing on Long Beach’s groundbreaking initiatives in green and renewable energy. We’ll delve into the port’s green port policy, which has led to remarkable improvements in air quality and environmental standards.

(5:59 – 6:40)

Since two thousand and five, the port has achieved a ninety two percent reduction in diesel emissions, a seventy one percent decrease in nitrogen oxides and a ninety eight percent reduction in sulfur oxides. We’ll also touch on the port’s ambitious projects, including the Pier B on dock rail support facility and the innovative Trigen system developed in partnership with Toyota Motor North America and Fuel Cell Energy. If we’ll be kind enough to share his thoughts as well, we’re going to ask him what he thinks about the role of the FMC is under the changes and increased enforcement that Congress granted under OSRA and what he thinks their priorities will be, especially given their active role in mediating to merge detention and liquidated damages.

(6:40 – 6:52)

And if that will change under President Trump, please welcome today our very special guest, Mario Cordero. Mario, it is a pleasure to have you with us today. Thank you so much for taking the time to do this.

(6:53 – 6:59)

Well, thank you, Scott, for this kind invitation. Absolutely. So so TPM next week, that’s that’s getting ready to get going.

(7:00 – 7:06)

The twenty fifth one. I mean, it started as the Trans-Pacific Maritime Conference. They’ve they’ve shortened it up to TPM.

(7:06 – 7:28)

I’ve been out there a number of times. Cameron, I know that you’ve you’ve spoken and been a panelist in preceding years and are going to do so again. What does it mean for for you and for the port of Long Beach to host just this this world class event that happens this time of year? I sort of look at it as the kickoff to traditionally it’s been like the kickoff to contract season for carriers and BCOs and the OCCs.

(7:28 – 7:54)

What does it mean to Long Beach to have this event in town every year? And what do you see it as and how has it evolved over time? Well, first of all, I think we are very honored that the TPM leadership and the ownership have chosen Long Beach as a venue. And obviously, when you look at Long Beach as part of the San Pedro Bay complex, the largest container port complex in the United States is a proper venue to have it. So I think over the years it has grown.

(7:54 – 8:31)

And in fact, this year, I told that we probably have a record number of attendance over above the record that we had last year. So I think to the point in terms of for the port of Long Beach, obviously, the San Pedro Bay complex, like I said, the largest gateway in the country and Port Long Beach being the number two containerized port. I think it gives us an opportunity to further, again, move towards a scenario in which we have those tough conversations with all the stakeholders and educate ourselves in terms of what not only 2024 taught us, but what’s, you know, how do we look at 2025? So it’s going to be a myriad of topics that’s going to be of much interest to the stakeholders.

(8:31 – 8:50)

And again, for the port of Long Beach, it really gives us a face, so to speak, with regard to the maritime conversation. And the TPM event isn’t just necessarily one where people come and they listen to the speakers and the presenters. There’s a lot of either just meetings on the side or scheduled meetings between entities that happen because everybody’s in the same place.

(8:51 – 9:26)

So just as an example, and you don’t have to name names, when everybody comes to town like this, who do you sit down and have conversations with? Like what group of people and what are some of the things that come up during your discussions looking and planning ahead to the year ahead? Well, number one, I think the historical process here at the TPM, as you mentioned, Scott, it’s an opportunity to commence a service contract conversations. So service contract conversations commence. And over the last couple of years, I think at a fast paced, expedited manner, given the uncertainties in terms of what that means to the ultimate customer, the shipper.

(9:26 – 9:51)

So for us and for myself, I take advantage of having these meetings for our customers, the shippers, the VCOs and stakeholders that are important to the cargo movement at the Port of Long Beach. And obviously for us, I think we have a very good brand in terms of customer service and operational excellence. So clearly it gives us an opportunity to assess ourselves in terms of our customer needs and vice versa.

(9:51 – 10:21)

Our customers could have the opportunity to make sure that, again, with the Port of Long Beach, we have this definite conversation in terms of how we further our service here in terms of cargo movement at the Port of Long Beach. When we’ve been at the TPM, we’ve certainly seen a lot of different players and there’s been a lot of question about how to best manage the flow. And we’ve seen a lot of investments in different aspects of that, renewable energy, intermodalism.

(10:21 – 10:41)

What do you see as the Port’s priorities and the message it’s trying to project out with respect to TPM and attracting new customers? What do you think is the most attractive thing for your customers these days? Well, I think there’s two points. Number one, moving to cargo. I mean, and do it in a way that’s fluid.

(10:41 – 10:59)

And again, as I’ve indicated before many times, Cameron, the challenge of getting the container once it lands on the terminal from the vessel and having it leave the terminal on to the supply chain. So speed of movement is important to the customer. Second is how we do that.

(10:59 – 11:15)

And I think for the Port of Long Beach, we’re very proud that we do it in a sustainable fashion. And I’m talking about, again, the environmental component of our two-prong mandate that is moving to cargo and do it in a sustainable manner. But that environmental component also is a question of efficiency and reduced costs.

(11:16 – 11:35)

And I think when we talk about environmental initiatives, reducing emissions, electrification, I think you’re starting to see that over the years the customer has embraced that. And as a nation, again, there’s been a lot of progress with regard to how we move forward to sustainable development. You know what? It’s funny you talk about that, Ben, and it was one of the things that I’d sort of wondered about.

(11:35 – 11:46)

It’s from the time that all of us collectively started in it, you really have seen an exponential increase in the size of vessels. It was Panamax. It’s post-Panamax.

(11:46 – 11:51)

It’s 6,000 TUs. It’s 8,000 TUs. Now we’re up around 23,000 TUs and counting.

(11:53 – 12:08)

How do you sort of play keeping up with the Joneses? So the carriers are looking to optimize and maximize and put the maximum number of containers they can on a vessel to be profitable. And you dredge channels. You build out acres of a terminal.

(12:09 – 12:43)

You plan out how many meters of length you’re going to need, how wide, how long across, the number of rows across that the cranes are going to have to reach. How do you work with carrier stakeholders when you’re seeing innovation happening on the ship side? How do you keep up with advances in vessel size and draft and make sure that you’re ready for that when it happens? Well, great question, Scott. My first presentation in this position as CEO of Port of Long Beach, as you mentioned at the beginning of the program, I took this position in 2017, in the spring of 2017.

(12:43 – 12:59)

So my first state of port address was January 2018. And in that address, I mentioned that we needed to have an Amazon state of mind. Now, I’m not promoting a company, but the reality is the reason I referenced that is because Amazon changed everything.

(12:59 – 13:14)

We look about e-commerce, how cargo moves 24-7 in terms of those packages. You know, the customer wants that package on their porch within the week, the next day now at this point. So that’s what I was referencing, the Amazon state of mind.

(13:15 – 13:21)

And to the point, we need not to keep up with the Joneses. We need to lead. We need to be proactive.

(13:21 – 13:50)

And in that respect, I think for the Port of Long Beach, you know, when I left the commission in 2011, when I was serving as a commissioner, and I left to Washington, as you referenced the time. At that point, the largest vessel we had received or was calling at the Port of Long Beach was around 8,000 TU vessel. So when I come back in 2017 in this position, you know, I was there for the Franklin inaugural CMACGM vessel, 18,000 plus in 2016.

(13:51 – 14:11)

But in 2017, now that was going to a 20,000. Just last week, we had an MSC vessel at 23,000 plus. So the reason I mentioned that is because if you look at the Port of Long Beach in terms of our capital improvement project in the last decade or more, we invested in being what we call big ship ready.

(14:11 – 14:30)

So we were ready. We were ready for the Franklin vessel CMACGM, and we’re ready for the MSC and the Costco vessels that now are anywhere between 16,000 and 18,000 TU. So I think, again, that’s when I say the Amazon state of mind, we’re an enterprise department of a city.

(14:31 – 14:42)

So we are a public sector port. But we need to be proactive, like if we were a Google, a Microsoft, an Amazon. And so I think that’s the beauty of, I think, when you look at the Port of Long Beach, we’re always ahead of the game.

(14:42 – 15:06)

I’ve noticed a lot of technology being implemented in OBCT in particular. I kind of watched that as it was getting built from my window at the World Trade Center back in the day. And also with the new bridge, which obviously accommodates larger vessels, traffic and taller vessels being able to go over what was the Gerald Desmond Bridge at the time and was a kind of a relic of a bygone era.

(15:07 – 15:23)

In addition to those two terminals, is there anything on the shore side that people should know about that you’re planning for these large ships? Sure. Well, number one, as you mentioned, Cameron, we built the state of the art bridge. What is now the Long Beach International Gateway Bridge.

(15:24 – 15:32)

We built the state of the art terminal, Long Beach Container Terminal. Both of those endeavors were around $1.5 billion investment. And now we’re really focusing on rail.

(15:33 – 15:51)

That is, when you look at the ship to shore movement, as I referenced earlier, what happens to that container once it lands on the terminal? We need to get it out ASAP. So for us at the Port of Long Beach, our endeavor now of magnitude is the Pier B rail enhancement facility. That’s another $1.5 billion investment.

(15:52 – 16:18)

When that’s completed, it will be the state of the art interharbor rail facility. Now, the great news for the St. Peter Bay complex is the completion of the Pier B project is estimated to be around early 2032. Now, in the meantime, parallel to this project, the BNSF announced, as you know, a year ago or more, their investment of a $1.2 billion investment in the Barstow International Gateway.

(16:18 – 16:43)

Intermodal facility, which is about 130 miles away from the greater Los Angeles region. Now, that will be the largest intermodal rail facility in the country, 4,000 plus acres. So when you look at the connectivity between Pier B and the Barstow International Gateway project, now we’re really looking at cargo movement expeditious from the St. Peter Bay complex moving by rail.

(16:44 – 17:00)

Can you talk about the Trigen power system that’s going to be happening at Pier B? Yes, that’s a great project. So first of all, as I indicated, for the Portland Long Beach, we have a two-prong mandate. Our mission is to, again, cargo growth and do it expeditiously, moving the cargo.

(17:01 – 17:29)

And second, how we do it in a sustainable fashion. Now, the fuel cell question, in terms of what Toyota has done as one of our tenants, is will put us in a great position to really move towards our goal of zero emission transportation as it relates to truck drayage. We have a goal that by 2035, the drayage trucks at the Portland Long Beach, and in fact, the Port of LA, as the St. Peter Bay complex, will be zero emission.

(17:30 – 18:00)

So the fuel cell technology has really accelerated. So just in the short time, or relatively short time I’ve been here in this position since 2017, if you asked me back in 2017, what’s the trajectory of hydrogen, I would have said, we’re looking towards the end of the decade. Well, here we are in 2025, and I think that fuel cell technology has elevated to a point where the reality now is we now have 80 hydrogen fuel cell trucks.

(18:01 – 18:27)

Now, that’s a minimalist number compared to the 16,000 that operate daily. However, it’s really taking the track that by the end of the decade, fuel cell technology, hydrogen, is really going to be a big component of harbor drayage. Now, obviously, at this point, I will tell you, we have about 510 zero emission trucks, and of that number, 470 are electric, and the 80 are hydrogen fuel.

(18:28 – 18:44)

So we’re making progress with regard to our commitment to convert container drayage trucks to zero emission. But back to your question on the Toyota hydrogen fuel project. That’s, again, a cutting edge leading facility in terms of hydrogen fuel technology now that’s going to be used in the San Pedro Bay complex.

(18:45 – 19:28)

Now, right now, it’s for Toyota’s private use, but down the line, they’re going to open that for public availability in terms of hydrogen fuel stations. Sounds to me like you really see a bright future for hydrogen. And given some of the comments, and you’re well aware that the HTA and Matt Schrapp have, shall we say, expressed concerns about the ability to provide the trucking industry with adequate infrastructure to be able to accomplish the goal of zero emission with enough trucks, enough charging stations, without creating a contrary problem of the dray off, which always seems to be part of the conversation when that issue is brought up.

(19:29 – 19:36)

So I think the hydrogen trucks would certainly address a number of those issues. Do you agree with that? Absolutely. Because it’s about the range.

(19:36 – 19:48)

Absolutely. I mean, look back to the Cleaner Action Plan update that the ports released back in November of 2017. As it relates to trucks, a lot of the conversation at that time was electric trucks.

(19:48 – 20:08)

And I’m OK with the EV electric truck. But ultimately, for me, I didn’t think that was the answer. Only because when you look at hydrogen fuel in terms of the range and the potential of hydrogen and what we have available, obviously there’s an infrastructure issue that we have to address.

(20:08 – 20:25)

But in the long term, I’d always felt that that was probably the better option for a trucker, particularly container drayage trucking. Now, the great thing of what we have today is we have the electric trucks. The charging question is being mitigated year to year.

(20:26 – 20:37)

In other words, less time to charging. The battery issue, those batteries are pretty large for heavy duty trucks. They may get smaller as technology evolves.

(20:38 – 21:00)

So we’re in a very good position that we have two technologies, the lithium ion battery technology and hydrogen fuel that are moving us to zero emission. But ultimately, hydrogen is the one that I think, in my view, is going to be more productive for harbor drayage. And frankly, less of an environmental impact in the long term.

(21:00 – 21:22)

Because the problem with the lithium battery technology is what do you do with that battery after its lifetime use? So that’s a question that, again, our friends in the technology field are working with. But back to your question, Cameron. I think hydrogen really is going to be a technology that’s going to evolve and be better fit for heavy duty trucks overall.

(21:23 – 21:37)

I was out in Southern California in January and had the opportunity to visit. So the Port of Long Beach is partnered with a company called Forum Mobility. And I was out on site at the yard of one of the truckers that Forum Mobility does some work with.

(21:37 – 21:44)

And it’s the first time that I personally had a chance. I’m in Chicago. It’s the first time that I personally had a chance to see one of these alternative fuel trucks in action.

(21:44 – 22:07)

And it is the most remarkable thing that when you’re used to sort of the white noise that a diesel truck makes that you’ve been around all your life. And to have just this silent go by pulling 30,000 pounds behind it with nary a sound other than just hearing the chassis bouncing along, which you don’t normally hear over the sound of an engine. It really is remarkable just how that works.

(22:07 – 22:18)

And I got a chance to sit in the cab and how much more streamlined it is. But it is definitely a game changer. And it’ll be interesting to see, to your point, how it develops.

(22:19 – 23:20)

Pivoting a little bit, one of the things that the Trump administration’s approach to the duties that we kind of opened the show with caused a lot of questions and concerns about duty rates and tariffs. Are we going to go back to a more traditional approach of importing goods as a containerized product, serve e-commerce, then creating perhaps an increased number of duty deferral programs, either finding their way through customs-monitored warehouses or foreign trade zones? Who knows what mechanism will be allowed for or possible to use given the current pivots that we see by the administration? It’s difficult to know, obviously, with 86 being in jeopardy and 301 programs being questioned just across the board, certainly with respect to Canada and Mexico, and whether those are even practical or viable at 25 percent. It seems to me we’re going to see a pivot.

(23:20 – 23:45)

Certainly, Vietnam, they’re an obvious beneficiary. They were an obvious beneficiary. Kind of two-fold question is, do you see a lot of increased relationship and transit between other ports of call outside of China, China Direct Service? And also, Michelle Negan, she works for you and does a fine job managing the FTZ operations.

(23:45 – 24:52)

Have we seen an uptick in those as a result? I would see that if the cargo is coming, it’s flowing, it’s got to go somewhere, but do we want to necessarily import it and pay that duty, or do we want to try to defer it and avoid it? And as a follow-on question to that, Mario, if the port tracks the statistics, I would be very interested to know, given just over 2025, how much cargo is clearing at the port that’s leaving the port on a 1C, as Customs calls it, and how much of it is leaving in bonds? So, Cameron, to your point, there was a lot of this that came in and then just moved out of the country on a T&E into Mexico to some of those fulfillment warehouses. I’d love to know just sort of over time whether or not we start to see a trend of those things clearing at the port or just different types of releases taking those containers off, because to your point, that would be an indicator that business is shifting the process by which it’s handling the cargo that’s arriving at the port. Well, number one, the answer is yes to the question with regard to how that network or globalized trade route is expanding or diversifying.

(24:54 – 25:15)

So let’s go back to 2019. So to be clear, we’ve been living, that is the industry, in a tariff environment for a few years now, because the Biden administration did not take back the tariff conversation. So they continued, in many cases, the tariff policy.

(25:15 – 25:42)

So if you look to the Port of Long Beach, when the initial tariffs were implemented under the first Trump administration, we compared our 2019 volume to 2018. And you look at these numbers. In 2019, the imports from China that we received from the Port of Long Beach diminished by 20.5%. Now, on the other hand, the imports that we received from other regions went up 10%.

(25:42 – 26:02)

And if you go back to 2019, early 2020, that was the conversation that we were now having China plus one. And Vietnam was a beneficiary of that policy. And in fact, as a result of that, I’ve been to Vietnam twice to talk to industry customers in Vietnam.

(26:02 – 26:13)

That percentile is growing. In Vietnam, I was pretty impressed in the two trips I’ve been there with regard to their supply chain. Obviously, they have a lot of work.

(26:13 – 26:35)

But in terms of when you look at Vietnam where they were 10 years ago, a decade ago, it’s very improved. So whether it’s Vietnam, whether it’s Indonesia, whether it’s Malaysia, you’re starting to see the Southeast Asia component as being an option to China. So you go back a year ago, there was a lot of conversation, in fact, at the last TPM in 2024, on nearshoring.

(26:35 – 26:55)

That is, does this manufacturing now come back to the Western Hemisphere, primarily Mexico? So query whether or not it’s China plus two, or you’ll now have China plus three. So obviously, again, those relationships with other regions are paramount now. Now, we’ll see how this plays out with regard to the tariff and duty question.

(26:56 – 27:51)

Obviously, history will tell you that at the end of the day, if tariffs are going to be addressed to address a trade imbalance, history tells you that’s never accomplished, for reasons that probably go beyond this discussion. But on the other hand, there are some legitimate concerns that we have, such as the drug trafficking, that my hope is that the administration, as it relates to Mexico particularly, is using that more of a negotiation tool. Because if you start applying 25% tariff on Mexico, you’re really going to have a negative impact on the automobile industry, auto parts, ag, and the nearshoring that is contemplated that’s going to come out specifically for Mexico, which is going to benefit, in my opinion, the United States, not only in terms of costs, options, security.

(27:52 – 28:18)

So there’s a lot at play. So at this point, I think from my perspective, we have lived with uncertainties in the supply chain, the worst of all when we went through the COVID-19 supply chain crisis, 109 vessels down the coast here of Southern California. So since that time, we’ve continued in uncertainties for a lot of geopolitical reasons, or discussions, that is.

(28:19 – 28:41)

But at the end of the day, look what the Port of Long Beach moved in 2024, $9.6 million. Add to Los Angeles’ number, Port of LA, approximately $20 million. So I’m confident that despite these concerns, the markets will adjust and somehow, again, we’ll be able to move forward in a pragmatic fashion.

(28:41 – 28:57)

Now, that’s my optimistic side. But of course, again, we’ll see how 2025 ends up. I’m trying to kind of placate a little bit about the traffic duty conversation, because business is not going to stand on the sidelines and be a victim of unreasonable costs.

(28:57 – 29:03)

I think politics will address that. I’m sure the lobbyists will be busy. That is for sure.

(29:04 – 29:36)

I did want to follow up on our FTZ question, though. Do you see increased activity? Obviously, the foreign trade zone component is a part of what the Long Beach port complex has to offer. It certainly covers a larger geographic area than the bonded warehouse, which is somewhat limited when you’re looking to the south, because it just doesn’t encompass things south of the 605 freeway into Orange County, where you can build an FTZ in the Orange County region.

(29:37 – 30:07)

Have you seen any stats on that that make you think that that’s going to increase development? Yes, we’ve had an increased number with regard to the foreign trade zone interest. In fact, I just had a meeting with an entity that was interested in a foreign trade zone application, which is beyond our jurisdiction in San Diego County. But it tells you that people are looking to the FTZ option as a way to reduce some of their costs.

(30:08 – 30:32)

So that’s going to be in play, and we have seen increased interest in that. I think, again, the primary question right now for the industry is more of the issue of the tariffs and what that means to the supply chain, what that means to the economy, and what that means ultimately to the consumer prices. Also, I wanted to ask you a few questions about your time at the FMC and maybe the FMC’s continuing role in all of this.

(30:33 – 31:14)

We see a lot of things that have come out of the D&D and the interpretive rule recently with Evergreen and the ability of terminals to charge even on weekends and times, perhaps. I know the rules here in California are a little different because we actually have a law about whether or not you can charge D&D as opposed to just an interpretive issue relative to OSRA 2022. But how do you think OSRA 22 plays out, and do you think it’s really addressed some of the D&D issues, or has the FMC gone far enough, or what do you think about what the FMC’s up to? Well, first of all, I think the FMC is on a good track, primarily because of OSRA.

(31:14 – 31:38)

Now, the tension to merge has been a subject matter of much debate for a number of years when I was chairman. That was one of the primary issues that was brought to me. Now, when I was chairman there, I never thought, though I had my view of perhaps a second look at OSRA, that we would have an amendment to it in the way that we witnessed here under the Biden administration and at Congress.

(31:39 – 32:06)

And I thought for the better, quite frankly, because again, the export entities like AGTC was very, very vocal with regard to the impact of the tension to merge on their customers or their members. So that’s an example how you have to navigate, because the tension to merge is placed for a reason, so that the terminals are not seen as a warehouse. But on the other hand, going back to my earlier comments, we need to move the cargo.

(32:07 – 32:26)

So we cannot have a scenario where detention to merge is allowed as a warehouse for the bigger VCOs. This was only part of the problem of the supply chain crisis back in 2021, 2020. You remember the dwell time at terminals.

(32:27 – 32:43)

And we had a capacity issue, which we no longer have. But part of that capacity issue is the inability of moving out the container from the terminal. So going back to the FNC, we released a study, because when I was chairman, I decided we need to study this issue of congestion.

(32:43 – 33:09)

But this is back in 2014 when I did this, only because of the repeated conversations we had on bottlenecks and congestions at our nation’s ports, or at least some of them. And we released a report in July of 2015. That report that the FNC produced was very relevant to the supply chain application in terms of lessons learned, how we resolve these issues in 2020 and 2021.

(33:10 – 33:56)

Detention to merge is part of that conversation. So now you saw that because of the outcry of beneficial cargo owners and exporters, importers, both, it was a bipartisan approach to address this issue, which was amazing to me, in that you had an amendment to the Ocean Shipping Reform Act that now allowed the FNC a little bit more resources, more funding, and direction from Congress to deal with some of these issues that were of big concern to our exporters, particularly, and I’m talking about detention to merge. So where we’re at today is the FNC is now, again, trying to move on what has been amended on to address this issue.

(33:56 – 34:12)

It’s still a debate on how we go about it. But under Chairman Maffei, I think he did great things in terms of making sure that was implemented. I’m talking about the concerns that the bipartisan Congress or members who pushed that regulation or amendment to the OSRA.

(34:13 – 34:39)

And of course, now with Chairman Sola, I do expect Chairman Sola to kind of continue that track in terms of making sure that our shippers, our exporters and importers, the exporters particularly, are not harmed by burdensome type of policies at our marine terminals. It includes carrier to merge, by the way. I’m glad you raised exports because the tariff issue and a lot of other things tend to, you know, imports to get all the oxygen, all the attention.

(34:40 – 34:58)

But, you know, if you look at the president’s America First trade policy and some of the things that the Heritage Foundation have published, it’s clear that the view, which might be overly simplistic, but at the end of the day, the view is there’s a trade imbalance. That’s a problem. We have to fix it.

(34:58 – 35:40)

Now, part of this is reducing imports, arguably, and part of it has to be, by definition, increasing exports. How is the Port of Long Beach prepared to handle exports? And what are they doing to the Port of Long Beach, really trying to do to attract the export community? And what commodities do you see being something that maybe Long Beach will specialize in? I don’t know what it would be, but, you know, I know that we export a lot of agricultural product, a lot of scrap metal, a lot of scrap product. Traditionally, some of that’s gone away over the years because of regulation overseas with respect to plastics and metals and other products.

(35:40 – 36:02)

But where do you see the growth in export? And how is the Port of Long Beach going to handle that? Well, first of all, it’s a legitimate question and inquiry to make sure we address that imbalance. However, it’s been a difficult one. If you go back several administrations, they’ve all had some form of an export policy to address that trade imbalance.

(36:02 – 36:29)

You know, when I was in Washington, the Obama administration had the National Export Initiative. And the FMC was part of, again, working with the U.S. Department of Agriculture to enhance or at least create more mobility with regard to our exports. Now, to give some context of what that actually takes, a port like Long Beach, you know, if you look to the last year, to give you some context, the movement of containerized cargo, 12% of that is export.

(36:30 – 36:47)

Overwhelmingly, imports is the name of the game. Now, should it be that? The answer, no. But how do we change that? So I think, again, we’ll wait and see how the Trump administration handles this in terms of their legitimate concern on creating or addressing that imbalance.

(36:47 – 37:18)

But needless to say, that’s going to be an important part of our economy for our farmers, our ag, our grain, because, and of course, you know, whether it’s pork, whether it’s meat, whether it’s poultry, these are export items that are very much in demand, particularly in Asia. And now, when I say particularly in Asia, there’s a region that we’re having a tariff scenario debate taking place. So we need to be careful how we navigate that, because for every tariff, there’s a retaliatory tariff.

(37:18 – 37:33)

And now we’re talking about addressing the reciprocal tariff. It’s a challenging issue. And I think, for me, at the age that I am, when I was in high school, you know, Levi’s jeans was in demand throughout the world, you know, made in the USA.

(37:33 – 37:40)

That’s non-existent today. You’re not going to buy denim jeans that are made in the USA. If you can, it’s going to be limited.

(37:40 – 38:00)

It’s going to be costly. So the real question that we have to really assess is, do we really expect manufacturing to come back to the United States in the way of the generation that I grew up? As much of an optimist that I am, and people know I am an optimist, on that question, I am not optimistic. You know, I think globalization will continue.

(38:01 – 38:19)

I think one of the great books I’ve read, and I’m sure you guys have read Mr. Levin’s book, The Box, when it came back out in 2006, I think. And then a couple of years ago, he had a second edition to that outside The Box. And he’s indicated, you know, globalization will continue.

(38:19 – 38:33)

It will have different trajectories of what that’s looking like. We’re seeing that right now with the movement of manufacturing to Southeast Asia and other regions in the world. So I think, number one, it’s a legitimate issue we need to address.

(38:33 – 38:51)

But we have to understand it’s going to be a very challenging one. The interesting thing about that, Mariona, and I really appreciate the perspective on that, is we think about an imbalance not just sort of by number of containers, but also by value. So, I mean, there’s a lot more high value things that come in.

(38:51 – 39:01)

I mean, a container of television sets is probably going to be worth more than, say, 10 containers of soybeans going out. I don’t know. But we could certainly make up for the imbalance volumetrically.

(39:01 – 39:29)

So when you look at a lot of those bulk commodities, if they don’t leave by bulk, maybe they can leave by bulk container. Your point about globalization, if we get back into the manufacturing game as a country, the question becomes, what can we produce that’s not commoditized to what you said, the Levi’s jeans? But the point is, there’s also a lot of sort of just private branding that’s taken on. So if you look at any of these really big, big box retailers, both here and abroad, they have their own private brand lines now.

(39:29 – 39:56)

Maybe you would make something for Sears back in the day, or you would make Craftsman back in the day. Now it’s somebody’s house brand, and that can be done any place. And the question becomes, is that the type of manufacturing that we could lure back here? And is it the type of manufacturing we want to lure back here? I was at a conference yesterday, a trilateral thing with US, Mexico, Canada, and we were talking a little bit just about what a modern day factory looks like.

(39:56 – 40:21)

And it’s like somebody pointed out, it’s like you have a room full of engineers, and then you go out onto the factory floor, and it’s a bunch of machines with one or two people walking around to make sure that the machines are working well. So the concept that we have of bringing back manufacturing, a room full of people sewing, cutting, stitching, that’s not what reshoring manufacturing is going to look like in the future. You’re correct, Scott.

(40:21 – 40:37)

I think let’s look at a couple of examples of how this has played out. Under the Biden administration, there was a lot of emphasis with regard to the manufacturing of chips for security reasons, which I think everybody agrees. Yes, we need to address some security issues here.

(40:37 – 40:54)

And if we do have manufacturing that may cost more, it’s worthwhile to spend that money on the issue of security. So chips is a great example. But what happened? Intel put all their energy on that, and Intel right now is not doing very well.

(40:54 – 41:20)

Other companies like Nivea, they figured, we’re not going to do the manufacturing, but we’re going to do the design. That worked out real well, which basically tells you that even with something like chips, you’re going to rely on entities from Taiwan, the leading chip manufacturer. Now, when you look at, as we do at the Port of Long Beach, what’s the month-to-month retail numbers, the consumer spending? Well, we all are looking at the fact that Walmart’s doing quite well.

(41:20 – 41:39)

There’s people in the upper income bracket who are shopping more at Walmart than ever before. Why? Because the consumer wants to save costs. All right? So when you look to a piece of furniture that’s made in the United States, you’re going to pay a lot more money than the IKEA furniture.

(41:40 – 42:04)

And by the way, IKEA is your largest import of furniture by far. Talking about tariff application, what that means to the, particularly I’m talking about the American middle class, because the American middle class, they’re going to save money. And if it means, you know, saving 20% buying somewhere else or 20% buying a product that’s not made in the USA, that’s where they’re going to spend their money.

(42:05 – 42:25)

So I think, again, it’s interesting when you look at where the consumer is spending, you know, the upper echelon brands now are not doing as well as they did maybe a couple of years ago. And lower cost brands, and I give Walmart as the example, they’re doing well. Now, a lot of it also is e-commerce.

(42:26 – 42:49)

And again, I’m not promoting Walmart here, but I’m just giving you an example that’s interesting how upper income people are now being more attracted to go to Walmart, which by the way, you may know that Walmart is selling a t-shirt there that’s made in the USA, a very good t-shirt. However, it costs more money. Now, they were able to make a deal with Walmart to lower that cost.

(42:50 – 43:05)

But if you tell the average family, do you want to pay 10 bucks for a t-shirt or you want to pay 20, they’re going to spend 10 bucks for a t-shirt made in Bangladesh or Mexico or Vietnam. And that’s the reality. And that’s the challenge we have in a globalized economy.

(43:06 – 43:42)

I want to pivot back to the wind energy project that has been discussed. What’s the status on that? And what role do you see as wind or other forms of renewables playing in the energy needs of the Port of Long Beach? Obviously, if we go to more robotic, more technologically advanced terminals, there’s a lot bigger energy need. And of course, the cold ironing that has been required as a result of the California air emissions concerns and the like.

(43:44 – 44:09)

How do you see that all coming together? What’s the master plan? Things that we need to look at as a nation under the classification of security. So as to pure wind, needless to say, the reality right now is that the administration of Washington, that’s not an overriding priority for them right now, wind energy. So we’re going to have to navigate what we’ve been able to do here in California.

(44:10 – 44:20)

And of course, what the federal policies are right now. It’s a long-term project. We’re a long time away from the real evolvement of pure wind.

(44:20 – 44:38)

But the reason I mentioned security, because the goal of California is to have 25 gigawatts by year 2045. And the reality is the energy demand is going to be sixfold at the Port of Long Beach in another five years because of electrification. For the nation, when you talk about data centers, AI, it’s huge.

(44:39 – 44:53)

The grid, as we know it, is not going to be the sole option to address our future energy demands. So it’s going to be a wide portfolio, which in my view includes renewable energy and wind. And for those who question that, look where China’s at, by the way.

(44:53 – 45:06)

We talk about China. China has 30 gigawatts of wind energy today. And again, I think that’s going to be part of the conversation that we need to have in terms of energy resiliency and energy security.

(45:08 – 45:41)

One of the things that the previous administration spent a lot of time focusing on about was just China’s efforts to get involved more in sort of the U.S. infrastructure and just points of concern as we’re taking a more, I’m loathe to use the term nationalist trend, but as we’re focusing on more just sort of America-centric and protecting American intellectual property, industry, commerce, things like that. The issue of Chinese cranes came up, ship-to-shore cranes. And let’s face it, no port is a port without ship-to-shore cranes.

(45:42 – 46:27)

The Navy under the previous administration expressed concerns that they couldn’t bring their vessels into places that had Chinese manufactured cranes because of data that was or wasn’t being captured, sent back as part of the telematics. I know that they, I believe it’s Sumitomo that they’re looking into doing a partnership with here in North America to manufacture these ship-to-shore cranes in North America. But as it pertains to cranes, does it matter to you as a port or any of your other port peers where they come from and is this a founded concern or not? Well, number one, speaking of Chinese cranes and more specifically ZMPC, they compose 80% cranes in the U.S. are Chinese ZMPC.

(46:27 – 46:51)

Now, have we had a problem at the port of Long Beach with ZMPC? The answer is no. Should there be concerns about security and with the legitimate of the inquiries? The answer is yes. So I think anytime you have technology or software in play, let’s face it, the world today is about cybersecurity, digital interfacing that could create harm by nefarious characters or nefarious users.

(46:52 – 47:07)

So you have to have that concern. Cranes are made in China, made in Mexico, made in Korea with regard to the issue of security. So I’m not going to be dismissive of what the congressional committees have been concerned about.

(47:08 – 47:28)

But I will say that on the other hand, I don’t think the United States is prepared to manufacture these cranes domestically. And the reason is because if you talk about a ZMPC crane that will cost you about $13 million, multiply that by two if it’s made in the USA. And even if the crane’s made in Canada or Mexico, it’s still a significant cost.

(47:29 – 47:49)

So I think the question really is, is issues that we have to do with regard to our greater data sharing cybersecurity areas in terms of how we enhance firewalls to protect that. And you want to be a little bit more simplistic, look at truck chassis. You know, there’s been a lot of conversation that, you know, chassis should be made in the USA.

(47:49 – 48:06)

Now, where are we now in 2025 on domestic chassis production? It’s challenging, much less a $19 million crane. One of the things that’s also been discussed is the supply chain superhighway. And what role is the Port of Long Beach playing in that? A big role.

(48:06 – 48:20)

So we were talking about the TPM and the topics of recent years at the TPM. One of the major ones have been data sharing technology. Now, if you go back, let’s say, 10 years, when I was chairman at the FMC, go back to 2015.

(48:21 – 48:33)

The conversation of data sharing was difficult because of the whole question that everybody wanted to protect their intellectual property and their business interests. But we’ve gone beyond that. Everybody’s embraced data sharing.

(48:34 – 49:06)

I’m talking about stakeholders, whether you’re a railroad, a trucker, a shipper, a port authority. So I think what we’ve done now is at Port of Long Beach, recognizing that no matter what sector you talk about in the industry, everybody has a platform of some form of data sharing. So for Long Beach, we figured what we need is an integrated platform or integrated system where no matter what platform you have, whether you’re a port, whether you’re a railroad, whether you’re a truck, you could come into this integrated system and then get the information you want or you don’t want.

(49:06 – 49:45)

So I think this is the beauty of what we’ve introduced, the supply chain information highway, because at the end of the day, every year at the TPM, we’re talking about how do we further transparency? How do we further visibility? And if nothing else taught us during the supply chain crisis that we had in 2020, 2021, everybody wanted to know, where’s my container? When does it arrive? And I think, again, to that question, we’ve made great strides at the Port of Long Beach to have moved forward now. We’re in phase two of that project. And again, we have a ways to go.

(49:45 – 50:06)

But the progress that we’ve made, I think, again, is admirable. And I want to give credit to the state of California, the GO-Biz office, where we see some funding for the project. But again, data sharing is going to be a big part of the global supply chain technology implementation, because we need to make sure that cargo is visible, transparent, and moves in a way that’s efficient.

(50:06 – 50:29)

And I want to follow up on that, because there’s been a lot of talk on the port optimizer at one point was a buzzword that people like to use. And historically, some of my trucking clients have always struggled trying to get appointments and figuring out what the status is of particular boxes in a particular container. So you had to go to, for example, TTI.

(50:29 – 50:43)

You’d have to go and look at their system and figure out what’s over here. You’d have to see what’s the availability, what shifts are working. But then you’d go over, perhaps, and try to go on to Pierpass and try to get an appointment of some form.

(50:43 – 51:07)

And is this system going to integrate all of the both Port of Los Angeles and Long Beach terminals, as well as all these other players? Is that that’s the game plan? Well, first of all, there’s the integrated highway, which we call the supply chain highway project. And of course, there’s the appointment system of truckers. So the end goal is to have a universal appointment system in the San Pedro Bay complex.

(51:07 – 51:17)

I strongly believe we need to do that. I’ve said that going back to 2017. Now, the good news is each port, if you look at the San Pedro Bay complex, is developing an appointment system.

(51:18 – 51:45)

And we hope, and we’re working towards the fact that at some point, those two systems connect to have a universal appointment system at all 12 of the container terminals in the San Pedro Bay complex. That’s what needs to happen. But again, right now where we’re at with the supply chain information highway is we’re working with our six terminals to make sure that that appointment system is effective and where initial indications are that it is.

(51:45 – 52:07)

And then we’ll move over to step two of this process, which I’m optimistic that we’ll be able to get there. Getting that connectivity would be a very beneficial thing because I just know from my own forays into this, because when lawyers start moving cargo, that’s a dangerous proposition. But we’ve gotten involved in it, especially during the COVID period.

(52:08 – 52:22)

We’re trying to get releases and figuring out just the chassis situation is incredibly complex. It is. I was having not been in the ops chair for a better part of 15 years and all of a sudden having to get deeply involved in it.

(52:22 – 53:06)

Understanding that, you know, okay, what interchange happened? Was that a private or non-private chassis? What does that mean? How do you return that chassis gets even more complex depending on whether it’s a gray pool or it’s the private chassis situation, who will accept it? What will be proper termination of it so that you’re no longer playing a day rate on it? And you start looking at the costs associated with it. It’s pretty amazing because I’d say the average rate is around $32 or $34 for a gray pool chassis. Then you get into the private marketplace, it could be as high as the mid forties.

(53:07 – 53:28)

There’s quite an interesting additional cost because you take that container, you put it in the yard because you don’t want to pay terminal demerit. But now you’ve got to pay for the yard storage, which could be $30, $40 a day or perhaps less. But that’s not seen as being outrageous when you consider that it’s $250 at the terminal.

(53:28 – 54:11)

And then you’ve got your chassis at $35 and then you have the risk, of course, that it’s in a less secure area because now you’ve just put it in someplace in Rancho Dominguez or wherever. So now the questions are, is that a good move? Is that not a good move? How do you mitigate that? Well, number one, I would encourage everyone to read the Industrial Administrative Economic Survey released by the city of Los Angeles in October of 2018. It’s part of that and basically under Mayor Garcetti, who procured that study, there’s a couple of chapters on the San Pedro Bay complex and what we need to do to enhance the economy of the region.

(54:11 – 54:48)

In that study, it talks about the urgent need for the two ports to maximize collaboration. Now we’ve had collaboration, but you mentioned two areas that are challenging for one port to do on its own, chassis, and of course, we’re talking about the whole issue of data sharing and respective platforms. So I think in answer to your question, the frustrating thing right now is the kind of friendly competitive atmosphere that we have that we need to kind of bridge in the best interest of the San Pedro Bay complex and frankly, in the best interest of the state of California.

(54:49 – 55:17)

Because this is the greatest, most significant container gateway in the country. California is the fifth largest economy for a reason, in large part because of international trade and the Southern California ports. However, this is probably the most complex and using that word redundant, complex in the nation because you have 12 terminals in one gateway and two port authorities.

(55:18 – 55:40)

Other gateways have four terminals, two terminals. So when you deal with truck appointments and other issues like chassis, it’s an easier fix, but when you deal with the San Pedro Bay complex, I think there’s opportunity for us to really enhance the kind of collaboration that we need to have. Because for me, Cameron, from day one, I’ve been talking about the San Pedro Bay complex.

(55:41 – 55:55)

I’m not looking to what New York, New Jersey, Charleston, Savannah, my colleagues in those ports and go down the line. Houston, they’ve done a great job in investment in their own infrastructure. Shippers have options.

(55:55 – 56:07)

So, you know, I’m not looking at the scoreboard there on the Eastern Gulf Coast. I’m looking to what we need to do on the field here. And I think that for me is a priority.

(56:08 – 56:51)

As I indicated towards the end of my presentation at the State of the Port, we need to really enhance and maximize our collaboration. Well, it would make sense because fixing what you can fix and is in your own backyard will have the greatest impact to the port’s long-term success and overall achieving of its customers’ goals, which is, you know, free fluidity, maximizing efficiencies, and doing so with an eye toward making sure it’s environmentally… You know, and Chassis is a good example of the difficult issue that is before us that we’ve been unable to address as two separate ports. And I think there is an answer to that.

(56:51 – 57:29)

Another one is query whether or not, you know, we’ve been talking about the environmental and the fuel energy issue. You know, the coming of the transitory of the new fuels in the transportation, water transportation, you know, be it LNG, methanol, ammonia. At some point, the questions have been posed about, do we have a bunkering system here in the San Pedro Bay Complex to accommodate what we’ve seen? And I think query whether or not that’s a project that the two ports will come together and say, let’s do this bunkering fuel, whatever that may be.

(57:30 – 57:53)

LNG is problematic, although I think LNG, we should, but whether we have the political will here to do that, that’s another question. But if you want zero emission and decarbonization, you need to think of LNG, methanol, and even ammonia. I know ammonia is difficult sometimes to some of our environmental advocates, but we have ammonia here in the state anyway, in the ag movement.

(57:54 – 58:13)

So no matter what option you choose, there are risks. So I’ll end by saying for the Port of Long Beach, we’re not risk adverse. Obviously, by some of the projects we’ve entertained in the past years that we’ve completed, and now, of course, the projects that we have before us that we are moving forward with.

(58:14 – 58:24)

Mario, we really do appreciate your time today. So for Mario Cordero and Cameron Roberts, this is Scott Case of Logistically Speaking. Have a wonderful day, everyone.