How do maritime ports in California and Washington state keep trade flowing?
U.S. West Coast ports are responsible for over 50% of all U.S. imports according to the U.S. Chamber of Commerce. The maritime ports of San Diego, Los Angeles, Long Beach, Hueneme, Oakland (all in CA) and Seattle-Tacoma, WA, are critical economic gateways to the U.S.
“These ports play an important role in distributing cargo to western and mid-America,” says Patricia Compres, co-owner of Advance Customs Brokers & Consulting in Miami, FL. “Most of the time bringing product through these ports means saving on truck freight costs.”
West Coast ports provide a direct line of access to points west of the Mississippi for produce grown in South America, Oceania and Asia, explains Nicholas Saggiani, regional port and warehouse operations manager for Oppy/Oppy Transport in Carson, CA. “Using Western ports also prevents the need for cargo to go through the currently drought-stricken Panama Canal,” he says.
West Coast ports serve as Fyffes’ primary entry points to reach customers from California to Washington State and certain regions in Canada. “As a leading importer and distributor of produce our goal is to consistently deliver reliable, timely, and efficient weekly shipments to our customers,” says David Otero, vice president of operations and supply chain for Fyffes North America in Miami, FL. “The primary advantage these ports offer is the opportunity to fulfill our core objective which is centered on our ability to import and distribute the highest-quality tropical products swiftly, reliably, and effectively to meet customer demands.”
About 50% of Zespri Kiwifruit entering the U.S. goes to consumers on the West Coast. “Since it’s all shipped by sea from New Zealand, it is important to have a strategically located, efficient port to receive these shipments,” says Mike Knowles, strategic relationships manager, shipping for Zespri of Mount Maunganui, New Zealand. “Our partners play a major role in our success.”
Western ports provide entre even beyond the coast. “In addition to serving California’s major metropolitan areas, western ports serve as gateways to other significant markets including Phoenix, Las Vegas and Salt Lake City, expanding the reach of fresh produce importers,” says Bryan Brandes, director of maritime for the Port of Oakland, CA.
WHAT’S COMING IN?
Major produce items imported through Western maritime ports according to Compres include: citrus, berries and grapes from Peru; plantains, bananas, melons and vegetables from Guatemala; pineapples from Costa Rica; and citrus and berries from Chile.
Marcel van Dijk, marketing manager for the Port of Los Angeles in San Pedro, CA, explains the southern California and southwest U.S. markets provide a large consumer base. “Exotic fruit sourced in Southeast Asia has the shortest transit time to U.S. consumers via Western ports,” he says. “Imported fruit from South America brings grapes and stone fruit in our winter season to the same large consumer base.”
Bananas rank head and shoulders above any other produce item imported in San Diego. “Dole uses San Diego as its primary, and only, U.S. West Coast port,” says Greg Borossay, principal of maritime business development at the Port of San Diego. “We receive approximately 3.9 billion bananas a year from Dole from South and Central America. The other major seasonal imports here are Chilean grapes. Lower volume fruits include avocados, papaya and pineapples.”
Fyffes’ Otero estimates approximately 23% of bananas imported into the North American market are received through West Coast ports, with a primary focus on Port Hueneme and San Diego. Presently, Fyffes services West Coast clients through a weekly service calling at Port Hueneme.
According to Otero, the supply of bananas predominantly originates from Guatemala, Ecuador and Mexico for conventional bananas, and from Ecuador, Peru and Mexico for organic bananas. “Fyffes North America in particular imports/distributes bananas, pineapples, plantains, exotics (manzanos and burros) and tropicals (yuca, chayote, malanga) into West Coast ports,” he says. “Our volumes through the West Coast ports represent approximately 18% of our total imports in the U.S.”
In 2022, the Northwest Seaport Alliance of Seattle and Tacoma ports (NWSA) imported 106,723 TEU’s of produce through its gateway according to Steve Balaski, director of business development. He notes the Port of Los Angeles processes around 61,000 to 65,000 containers (605,800 metric tons) of fruits and vegetables with about 60% imports and 40% exports.
Los Angeles and Long Beach are the two ports of entry for Zespri Kiwifruit shipped from New Zealand. “We shipped approximately 4 million trays of Zespri Kiwifruit through Los Angeles this year and plan to ship 4.6 million trays in 2024,” says Knowles.
Oppy imports a wide range of produce including grapes, kiwi, apples, citrus, stone fruit, blueberries, cherries and ginger from countries such as New Zealand, Chile, Peru, Australia, Italy, Greece, Argentina and Japan to the West Coast of the U.S. and Canada. “We mostly use Los Angeles, Long Beach, Port Hueneme and Seattle, but we’ve also had product go through Oakland and San Diego,” says Saggiani.
WHAT DO THEY PROVIDE?
Physical capabilities of the ports are a crucial factor. The Port of Los Angeles’ six container terminals have around 4,500 refrigerated container (reefer) plugs. “All reefer containers are on chassis and plugged in to electricity to maintain the cold chain,” says van Dijk. “The six major cold storage facilities around the port have a capacity of 119,000 pallet positions and provide multiple services to the importer or exporter such as transloading, pick-and-pack and USDA/FDA inspection rooms.”
From the moment Fyffes’ weekly containers arrive at Port of Hueneme, it’s crucial to maintain a seamless and efficient operation emphasizes Otero. “This involves customs brokerage, local discharge operations, drayage to our local warehouse/cold storage, local fruit quality control inspections, official CBP-AG inspections, and dispatching to our final customers,” he says. “The performance of each of these stakeholders directly impacts our ability to meet the high expectations of our customers. We are committed to continuously engaging with all stakeholders to address current and future challenges. Through this collaboration, we aim to pave the way for sustainable and efficient growth in the West Coast market.”
Speed and temperature control are two critical components in produce, explains Brandes of Oakland. “We have leveraged this by investing in temperature-controlled facilities,” he says. “We have on-port refrigerated warehousing and two Class I railroads for efficient distribution of freight to and from the U.S. interior. The availability of numerous ocean carriers serving Western ports provides flexibility to produce importers.”
Port Contecon in Guayaquil, Ecuador, is a port of exit for produce shipped to the Western U.S. “Based on Ecuador-Western U.S. transit, we see opportunities with shipping lines diversifying route offerings,” says Fohodil Galeas, chief commercial officer. “At Contecon we are making significant improvements in productivity and security to boost international trade between Ecuador and the U.S.”
The NWSA gateway is equipped with terminal infrastructure supporting refrigerated cargo including more than 10,000 refrigerated plugs for reefer containers describes Balaski. “Additionally, multiple of our international terminals have on-dock rail infrastructure,” he says. “Beyond our terminal facilities, we offer a network of neighboring cold storage facilities and refrigerated transload warehouses.”
To further aid in the process, Port of Los Angeles provides a data portal offering Key Performance Indicators, cargo prediction and cargo tracking features. “In 2017, the Port of Los Angeles and Wabtec Corporation launched the Port Optimizer, a first-of-its-kind information portal designed to digitize maritime shipping data for cargo owners and supply chain stakeholders through secure, channeled access,” says van Dijk. “Port Optimizer enhances supply chain performance through real-time, data-driven insights in a single portal.”
WHAT’S GOING ON WITH LABOR?
The biggest issue affecting West Coast ports in the past year was the labor dispute and work stoppages. Contract talks between the International Longshore and Warehouse Union, which represents about 22,000 dockworkers at 29 West Coast ports, and the Pacific Maritime Association (PMA) in San Francisco, CA, which represents employers, stalled over a year ago when the two sides could not reach agreement.
Fortunately, the sides reached an agreement in August 2023 and ratified a six-year contract. “This contract provides an important framework for the hard work ahead to overcome new competitive challenges and continue to position West Coast ports as destinations of choice for shippers worldwide,” says Jim McKenna, president and chief executive of PMA. “These ports have long been the primary gateways for cargo coming into and leaving the U.S., and our interests are aligned in ensuring they can effectively, and efficiently, handle the capacity growth that drives economies and jobs.”
The contract is key in providing a reliable flow of import and export cargo states van Dijk. “The Port of Los Angeles stays engaged with the different stakeholders from labor to shipping and transportation, as a neutral party, to bring companies within the supply chain together,” he says.
The six-year contract means a strong likelihood for labor peace on the West Coast, explains Borossay. “In San Diego, we have an excellent relationship with the ILWU Local 29,” he says.
WHAT ARE FUTURE CHALLENGES?
Hurdles for West Coast ports include space constraints and environmental regulations. “A big challenge among all West Coast ports is the capability to expand cold chain warehouse capacity near the ports,” says Borossay. “Our close proximity to cities means limited space.”
To address space and transportation constraints, the Port of San Diego maintains warehouses on terminal and others in close proximity. “We have available cold storage capacity in our existing city warehouse district,” says Borossay. “We expect to get some interest in about 150,000 plus square feet of warehouse space that could be on the market. We’re also establishing MOU’s with various warehouse companies at the U.S.-Mexico border.”
The other challenge, according to Borossay, is the California state requirement to electrify in the next five to 10 years. “California Air Resources Board (CARB) has very specific dates, triggers and thresholds for implementation of electric truck requirements in the state,” he says. “This will also be coming into place for Oregon, Washington, and even some East Coast states.”
California is driven to be ahead of the pack and ahead of federal regulations in protecting the environment from threats such as air pollution, says Saggiani. “Our ports in Los Angeles and Long Beach have proactively enacted rules and standards to substantially reduce noxious emissions,” he says. “This has created a tough regulatory environment that has thinned resources and increased costs in the short term but will hopefully set up West Coast ports to be well-positioned for the requirements of a cleaner future.”
Western ports pioneered shore-power technology, allowing vessels to shut down their engines while at port and significantly reduce carbon emissions, explains Brandes. “The five containerized ports of California have been at the forefront of national efforts to invest in reducing carbon emissions and adopting green energy solutions,” he says.
In February 2014, San Diego completed a $4.25 million project to install shore power at the Dole terminal. “This allows Dole vessels to plug into clean electricity while docked at the terminal so that they won’t have to run diesel engines,” says Borossay.
WHAT INFRASTRUCTURE IMPROVEMENTS ARE HAPPENING?
Ports and their partners are investing to meet the needs of the future. “Cold chain, food safety, handling and inspections are all areas we are working with key partners and stakeholders to improve,” says Zespri’s Knowles.
The Port of Los Angeles is investing $1.3 billion in a 10-year period. “These are terminal, rail and road improvement projects,” says van Dijk. “All these improvements will help produce by efficient handling cargo/containers and decreasing the time cargo is at a terminal for further delivery.”
Port of Oakland infrastructure improvements include widening of turning basins to improve vessel safety and efficiency, modernizing berths, upgrading power infrastructure to provide for the transition to zero emissions equipment and upgrading roadways to allow for safer, more efficient access to the port. “These improvements will deliver a more reliable, responsive and efficient supply chain for our customers,” says Brandes.
San Diego has taken out old warehouses on the dock face (circa 1950) and opened the east side to prepare for coming rail improvements. “Our future includes more rail capability for fruit,” says Borossay. “We’d like to see more movement of produce from vessel to rail with limited truck involvement. As we revisit each of our warehouses, we’re also adding more refrigeration and more separation within the warehouses to allow for separation and maintenance of different temperatures.”
San Diego’s biggest recent investment is the purchase and acquisition of two all-electric heavy-lift cranes. “They are on dock now and will be fully operational by December/January,” says Borossay. “Together they’ll give San Diego the heaviest lift capacity on the West Coast. They work in tandem but can also work separately. They’re also really helpful with the seasonal fruit — either breakbulk or tetra pack.”
The NWSA has several billion dollars in current and planned strategic investments across its two harbors to support the import and export of agricultural goods and produce. “At the start of 2024, construction on Terminal 5 in Seattle will be complete and fully operational offering 185 acres of terminal space with two berths that can serve the largest ships in the transpacific trade,” says Balaski. “The terminal is currently equipped with over 600 reefer plugs and on-dock rail which support agricultural goods moving to and from the terminal. An additional 1,000 reefer plugs are planned for the facility as part of this expansion project.”