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July 14, 2014 1:45 AM, EDT

Panama Canal Expansion a Primary Concern for New Port of Long Beach Chief Executive

By Michael G. Malloy, Staff Reporter

This story appears in the July 14 print edition of Transport Topics.

The implications of a wider Panama Canal on U.S. port operations, ongoing labor issues, mitigating congestion and boosting infrastructure are among the top concerns facing the Port of Long Beach, its new chief executive said last week.

“Clearly, the widening of the Panama Canal will affect volume coming from Asia,” said Jon Slangerup, who started in the position July 1.

The canal’s expansion — scheduled to be completed next year — “can both take business away from the West Coast, or could add volume,” he said, and “create an opportunity for shippers as an option for outbound shipments that can improve our trade balance.”

As with many ports around the country, truckers have complained about congestion at California’s Port of Long Beach and neighboring Port of Los Angeles, which together make up the biggest port complex in North America.

“Our job is to make sure our port is so efficient, and the entire supply chain is so well-oiled, to mitigate that,” Slangerup said in a July 8 interview with Transport Topics.

Slangerup was most recently with private-equity firm Moelis Capital Partners following stints as CEO with several environmental and energy companies after finishing a 20-year career with FedEx Corp. in 2000.

He takes his new post at a time when the International Longshore and Warehouse Union and the Pacific Maritime Association are operating under a recently expired labor agreement for 20,000 workers at 29 West Coast ports as negotiations continue.

PMA and the ILWU took a three-day break in negotiations last week, and longshore workers have continued working under their previous six-year labor agreement, which expired June 30.

“We’re not involved [with the negotiations] but as far as the relationship the port has with the longshore union, it’s a good relationship and we want them to feel secure” in the port’s operations, Slangerup said.

Asked about the possibility of a three-year, rather than a traditional six-year agreement, which the sides are reportedly considering, “I think, for them, the longer the better,” he said, adding that the port will operate with “whatever comes our way.”

In a separate labor issue, Long Beach and L.A. saw sporadic protests from a small number of Teamsters-supported truckers last week, who handed out flyers at three terminal employers over pay and classification issues. Slowdowns were minor, a Port of L.A. spokeswoman told TT, and Slangerup said “there wasn’t any disruption” in Long Beach’s traffic.

Meanwhile, retailers have been importing holiday merchandise at record levels due to the ongoing labor talks, according to the monthly Global Port Tracker report released on July 9 by the National Retail Federation and Hackett Associates.

“We’re still hoping to get through this without any significant disruptions, but retailers aren’t taking any chances,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy.

“Retailers have been bringing merchandise in early for months now and will do what it takes to make sure shelves are stocked for their customers regardless of what happens during the negotiations,” he said.

Slangerup said Long Beach is investing about $4 billion into its operations, including upgrading its Middle Harbor terminal and replacing the Gerald Desmond Bridge, which takes truck traffic to and from the port.

The Desmond is “old and a bit of a bottleneck,” he said, while the new span “will dramatically improve traffic from the port,” with a 210-foot clearance from the current 155 feet, and will take three lanes of traffic each way, from the current two.

Long Beach had originally targeted a 2016 completion but has pushed that back to 2017 or early 2018 because of construction concerns.

Those two projects account for about $2.6 billion of the total planned expenditures, Slangerup said, adding that Long Beach has “about 30 projects” under way.

“Many of the projects . . . are to mitigate congestion issues,” Slangerup said. “Our goal is to make the logistics operations on port property run as smoothly as possible, with a highly integrated truck and rail capability. If we do it well, the ability of trucking companies to speed their products in and out of the port will be improved.”

As to his management style, Slangerup said that while he is hands-on, he would not interfere with the port’s operational workforce. On his first day, he “met with every employee that I could; probably three-quarters of the team was present. This is a great team and they have welcomed me.

“My approach is to walk around and make sure people have access to me, but I will not micromanage,” he said. “I have to know what’s going on, and they expect me to be involved. While I’m not going to make every decision, I have to make sure everybody’s working together.”