President Donald Trump’s decision to abandon the Trans-Pacific Partnership could affect the Port of Long Beach’s ability to reduce its trade imbalance, Interim Chief Executive Duane Kenagy said Wednesday.
While the port’s cargo volume isn’t “totally dependent on new trade agreements,” port officials were watching for the TPP to potentially boost U.S. exports to Asia, he said Wednesday morning after giving the annual State of the Port address at the Long Beach Convention and Entertainment Center.
Last year the port imported 3.4 million loaded cargo containers, compared with 1.5 million in exports.
Kenagy said, however, that the Long Beach Harbor Commission never took a position on TPP and that “it’s way too early to assess impacts.”
Harbor Commission President Lori Ann Guzman noted after the address that China remains the port’s largest trading partner. The TPP was designed to ease trade obstacles with 11 other Pacific Rim countries from South America to Asia, but not China.
“I’m hoping that whatever plan the president develops maximizes U.S. exports,” Guzman said.
In addition to opposing the TPP and announcing he plans to renegotiate the North American Free Trade Agreement, Trump’s complaints over the U.S.-China trade deficit have stirred concern of new tariffs or even a trade war.
“The new administration’s trade policies and their impacts on ports are still unclear,” Kenagy said.
The uncertainty couldn’t come at a worse time for U.S. ports, and particularly the Port of Long Beach.
Last year the seventh-largest cargo container mover in the world, South Korea’s Hanjin Shipping Co., filed for bankruptcy protection, a symptom of the instability facing the shipping industry worldwide. Hanjin was the largest shipping company by volume in Long Beach and had a majority stake in the operator of the port’s largest terminal.
As Hanjin ships ground to a halt, Long Beach saw both imports and exports plummet every month in the last quarter of 2016, compared with the same period in 2015.
“This isn’t an easy time for us,” Kenagy told a crowd of about 300 Wednesday.
This month a U.S. bankruptcy judge signed off on the disputed sale of Hanjin’s stake in the Pier T terminal operator to Geneva-based Mediterranean Shipping Co. for $78 million, while relieving $54 million in debt.
Kenagy lauded the transition and said that in the coming year as MSC shifts cargo to its new terminal “full operations will resume at Pier T.”
He said the port is also making moves to further modernize and improve its operations, including adding to the port’s on-dock rail infrastructure in order to increase from 25 percent to 50 percent the amount of cargo that can move directly from ship to train. This would both make moving containers more efficient and reduce air pollution by relying less on trucks, he said.
Two major projects that will allow the port to accommodate the new, super-sized cargo vessels also are progressing, Kenagy said – the $1.5 billion Gerald Desmond Bridge replacement and the $1.3 billion Middle Harbor expansion.
