Los Angeles Port

8/11/2019 Los Angeles Port

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Eight lessons you can learn

about the global economyby visiting Americas busiest

seaport

This is how your Ikea furniture, Gap jeans and Nike shoes got to the United

July 7, 2014

The first thing you notice on a visit to the Port of Los Angeles is the cranes

towering along the water, poised over the massive ships beneath them. The

second is that there are no people, at least none visible: Sometimes you


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catch sight of a silhouette in a cranescontrol room or a truck cab, but the

work that goes on is largely far above human scale.

This is the US gateway to the most important economic trend of the

new century: The epic export-driven growth of Chinaseconomy.

Because it is the deepest port on the west coast of the US and 19

million people live within 200 miles (320 km), itsthe busiest port

in the United States. It handles the most containers and the most

goods by value, and is the sixteenth busiest on the globe (seven of

the 10 busiest ports in the world are in China). Last year, it handled

2,143 ships, and cargo worth $285.4 billionequal to almost 2% of

US gross domestic product.

My recent visit to one of the worldskey trade hubs underlined a few

things about how that trade works.

1. Bigger is betteror at least, more efficient

The bulk of the portscargo travels in containers, the 20-foot (6.1-

meter) long metal rectangles that standardized global shipping and

helped make the global supply chain possible. The port handles 7.9

million of them each year. Hereswhat merchant ships looked like

just as the container revolution was getting underwaythe S.S. Lane

Victory is a World War II-era cargo ship built in Los Angeles that is

now a floating museum:


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The S.S. Lane Victory is 139 meters long

And hereswhat container ships look like today. Evergreen

ShippingsEver Chivalrywas unloading cargo at the port when we

were visiting. At 334 meters, it is over twice as long as theLane

Victory, and carries nine times as much cargo by weight:

Massive container ships like this onea post-Panamax plusvesselcancarry about 7,000 to 8,000 containers, althoughthe newest modelsbeing

manufactured can carry up to 18,000. When they come in, tugboats and

pilots pull them into berth, and massive cranes pluck containers from the

ships, dropping them onto trucks that carry them to their next

destinationcustoms, one of 40 trains that departs the port each day, or

the highway.

2. Automation can be harder than it looks

Right now, a single crane at the port can unload about 30 containers per

hour, but there is pressure to speed up the system, especially as ships get

bigger. Every hour a vessel spends in port is money wasted, and labour

relations at ports are rarely easy, especially as many truck drivers are

employed as contract labourers rather than full employees. When I visited
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the port in June, competing shippers were sharing berthing space to make

sure they unloaded their vessels before the port workerscontracts expired

at the end of the month. While the port workersunion iscontinuing to

negotiate(pdf), shippers still fear a costly work stoppagea strike in 2012

left $1 billion a day on the docks and idled thousands of workers without

pay.

In 2009, the port decided to upgrade one of its container terminals with

new, super-size cranes and automatedstraddle carriersrobots that

follow magnetic strips in the ground to position themselves over

containers, snag them, and stack them. Such a system could increase the

unloading rate to 40 containers per hour, but the one for the port of Los

Angeles costmore than twice as muchas forecastjumping from $245

million to $510 millionand has become price-inflation folklorein the

port world.

3. You never know where investment will pay off

But for all the cost, the investment might be worthwhile. Fifty years ago,

this was mostly a fishing port, and a ferry ran between the mainland and

Terminal Island, the site of much of the port infrastructure. Back when

Terminal Island was home to just a few canneries processing fish, a local

lawmaker, Vincent Thomas, began a two-decade-long effort to build a

bridge to it. His opponents called it a bridge to nowherewhen it was

finally completed in 1963.
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The bridge to somewhere.

But with the advent of containerizationthe standard size for

shipping containers was set in 1961Thomassvision appeared

prescient. It allowed trucks loaded with cargo to leave the port andgo straight into the US highway system. It was a major advantage

for the port. Today, a few purse-seiners still fish out of the harbour,

but the last tuna cannery in the United States was shut down near

the port in 2001.


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4. Even geo-political enemies work together

This picture is a reminder of the binding force of international

trade. Shipping companies lease terminals at the port to manage

their cargo. Evergreen is a Taiwanese shipping conglomerate thatonce refused to handle trade from Chinasstate-owned shipping

company because of political tensions between the two nations. But,

as over-capacity has led shipping firms to work more closely

together to protect prices, Evergreen processes China Shippings

containers side-by-side with its own in Los Angeles.

5. The biggest sort of contraband isntdrugs, but clothing

knock-offsOfficials at the port brag that 40% of the goods on US shelves come

through their facility, and they may not be too far off. They may also

be moving goods that dontwind up on the shelves. Port officials say

that the most frequent customs violation isntdrug or human

trafficking, but fake designer clothing coming in from Asia. The

three biggest imports to the port are furnituresome 400,879

containersworth in 2013followed by automobile parts and


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apparel. Electronics only took up 217,617 containers. (Then again,

electronic devices tend to be smaller.)

6. One countrystrash is another countrystrade

The portsscrap-metal processing center.

The number one export from the Port of Los Angeles is airempty

shipping containers,to be precise. Itsa very tangible manifestation of the

US trade deficit with the rest of the world: When you import more than

you export, a lot of containers go back empty.

But after air, the next biggest export is trash. Specifically, 293,523

containersworth of wastepaper, much of which goes to China to be

recycled into boxes to feed that countrysown export machine. The

port also handles scrap metal at a dedicated terminal. The terminal

includes a mega-shredderthat can dismember cars and other

large metal objects in seconds. After leaving the United States, the

metal heads to Mexico, China or Brazil, where laxer environmental

regulations allow it to be recycled more cheaply into raw metal,

some of which eventually returns to the US.
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7. There are lots of huge metal reefers

Most containers are just metal boxes, but some of them are special:

They have an air conditioner stuck on the back so they can transport

goods that need to stay coolfruits, vegetables, fish and meats.

These refrigerated containers are known as reefers,and the port

of Los Angeles brings in lots of live crustaceans inside of them, and

exports a good deal of frozen beef:

A rack of reefers.


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