The ports of Los Angeles and Long Beach recently approved the 2017 Clean Air Action Plan (CAAP), which is an aggressive bid to reduce emissions.
The plan has come in for criticism from all sides.
Environmentalists are concerned that it’s not strong enough.
Maritime interests are concerned that the plan relies on non-existent technology and comes with a $14 billion price tag.
The twin ports of Los Angeles and Long Beach are playing a balancing act between these interests, leaving all stakeholders upset at the outcome.
Add this to the list of criticisms: The ports have given short shrift to the competitive environment they operate in.
Let us take a moment to consider these facts and factors concerning the ports, which have seen:
• A decade of stagnant port growth
• A decade of declining market share
• A newly expanded Panama Canal capable of handling larger ships than forecast
• Upgrade at ports on the East Coast and Gulf Coast
• A newly expanded port in Prince Rupert, Canada
The ports like to point out that one in nine jobs in Southern California are tied to flow of international commerce across our local docks.
It’s notable that the overwhelming majority of port cargo is discretionary and can be served by other ports.
This means that the competitive environment and decisions by the two ports directly affect the economic health of our communities. Indeed, such decisions can have the potential to strengthen or diminish our communities through their effects on port customers, various industries, small business owners and employees.
It’s surprising, given everything that’s at stake, that the ports did not take a serious look at how the addition of $14 billion in costs would affect their ability to attract discretionary cargo. The Clean Air Action Plan has no meaningful analysis of competitiveness, just an aggressive reductions in emissions, regardless of cost.
One might expect that the ports would surely have wanted to keep competitiveness at the forefront going forward in an effort to control their own destiny.
Yet they both are taking a pass at being the master of their own destiny. In the plan final Clean Air Action Plan, which the ports approved on November 2nd, they deferred the consideration of competitiveness to the State of California. The same state that has been ranked 50 out of 50 for business environment for the last six years running by Chief Executive Magazine. That is about as close as you can come to saying that these two ports have not taken the issue of competitiveness seriously.
The health of these two ports is a serious matter for both our communities and businesses.
That is why the larger business community has been calling on the ports to address competitiveness. These two port commission boards must signal that they take the economic vitality of these ports –and, therefore, the region – seriously.
The ports can do this in two ways.
First, they need to address competitiveness globally: why have other ports outperformed them for a decade?
Second, the ports need to address competitiveness programmatically: as the Clean Air Action Plan program is implemented, examine its impact on competitiveness and consider if there are less impactful ways to achieve the same results.
The ports must be as vigilant on their economic health as they are on the environment – our communities are dependent on both.
Ronald Stein is founder of PTS Staffing Solutions, a technical staffing agency that serves the energy industry
