Gene Seroka: Smooth Sailing Requires Relationships

Gene Seroka: Smooth Sailing Requires Relationships

By ZANE HILL Staff Reporter

Gene Seroka has been running the Port of Los Angeles since 2014. Since then, he has improved its import numbers, developed zero-emissions goals with the Port of Long Beach and undertaken a plethora of infrastructure improvements.

It is rare that Gene Seroka, executive director of the Port of Los Angeles, has a free window in his schedule.

First and foremost, he is busy making sure the nation’s top container port is firing on all cylinders. Much of that work sends him overseas, where he works with his peers to open shipping corridors and collaborate on economic initiatives. And then he often is needed in Washington, D.C., where he serves on bodies including the Intergovernmental Policy Advisory Committee.

Seroka reckons he traveled more than 200,000 air miles last year and spent 90 nights sleeping in hotels. Anecdotally, this sit-down interview needed to be rescheduled twice when unexpected travel obligations impeded.

Seroka was tapped by former L.A. Mayor Eric Garcetti to run the port in 2014, after spending a career in shipping logistics in the private sector that includes stints in major Asian hubs in China, Indonesia, Singapore and the United Arab Emirates. Since Seroka joined the port here, the facility has improved its import numbers, developed zero-emissions goals with the neighboring Port of Long Beach and undertaken a plethora of infrastructure improvements.

A Louisiana native, Seroka has become a supporter of USC and the Los Angeles Dodgers, as is typical of a transplant Angeleno; however, he remains a committed fan of the New Orleans Saints.

This interview has been condensed for length and clarity.

You’re coming up on a decade at the port. Recall for me what you inherited when you took the reins 10 years ago.

I came here with more than 26 years of maritime, shipping and logistics experience. I thought I had a pretty good understanding of the business here, but this port is multifaceted. It’s not just shipping. It’s working with various stakeholder groups across a wide spectrum, from organized labor, which is the heartbeat of this port; to elected and appointed officials at the federal, state and local level; a very astute community of about 260,000 people who live around this harbor enclave; and so many more who have an interest in this port. So, there was so much to learn from my side about all these other stakeholder groups, the folks who had a view of this port through different prisms and trying to understand what makes this place tick, because every decision that was taken here affected somebody. I quickly learned that I had a lot to understand, more so than a traditional private-sector guy coming in to a chair like this.

Cargo containers at the Port of Los Angeles. (Photo by Thomas Wasper)

There’s been a lot written and said about the cargo surge and logjam in 2021 and 2022. Looking back, what innovations was the port able to develop during that time, despite everything?

With the benefit of history, what I can tell you is the single most important detail back then was the fact that containers sat here for an inordinate amount of time. We did some data mining into our own system and saw that if a container sat for eight days, it would likely sit for weeks longer. The piles of container around the port just got unmanageable, so it was difficult for the longshore worker to be able to navigate up and down rows to pick up containers. Truckers had to wait in long lines. This port was designed as a transit facility – get the cargo off the ships, load it to a truck or train so you can work the next ship – and that wasn’t happening. It was data that allowed us to understand what the root cause was and then we took some action from there, like a potential fine all the way through to trying to understand how much further upstream we could see cargo coming in, so we could better plan.

Your career has stationed you throughout major Asian commerce hubs. Tell me about any lessons learned that you’ve brought to this job. I imagine living in China during SARS informed your Covid-19 response.

I think the biggest lesson I learned is that this is still a relationship-based business. There are folks I keep up with from all four of my stops overseas and the work that I’ve done on the ground in 50 different countries. I just came from a trip to India, Vietnam and Indonesia, where I spent time with people I’ve known for over 25 years. Six months ago, I went through Hong Kong, Singapore and down to Melbourne, Australia; I saw some friends I hadn’t seen in 17 years down in Melbourne. This business is really interconnected. Although it’s global trade and a massive footprint, it’s a core group of people that continues to propel economies across the world. Those relationships help you understand sensibilities.

With respect to SARS, that was probably the second scariest time in my life. It was an airborne virus that we didn’t know much about, that the medical community had to study really quickly. I was in New York as we were getting very close to what we called “Safer at Home” and locking down our American economy and workforce (because of Covid-19), and I was saying to the media this was going to be 10, 25, 100 times bigger than SARS because we had already seen that spread happening. Back in December 2019, we decided here at the port to stop all international travel. We saw the outbreak in South China. We saw what that could possibly do as the spread continued, and we said, we’re not going to take any chances. Save one bereavement trip in March, we stopped all domestic travel in February.

Gene Seroka in his office at the Port of Los Angeles. (Photo by Thomas Wasper)

It was shortly thereafter that then-Mayor Eric Garcetti named me chief logistics officer for the city to try to ramp up the procurement and distribution of that personal protective equipment. We procured and distributed over 11 million units of PPE to more than 250 L.A.-area hospitals, in addition to dockworkers, truck drivers and even the farmers in the Central Valley.

Those procurement skills, was that flexing some old muscles from your private-sector days, or was it a mix of what you did then and what you’ve done here at the port?

It was relationships. This was uncharted territory. We were building the airplane as it was flying. We have about 200,000 companies that utilize the port on an annual basis to import and export their goods; many of them are famous manufacturers, so we tried to use our relationship with them to learn how we could do things better. At the time, N-95 masks were selling on gray markets for $5 and $6 a unit. Prior to Covid-19, they would typically sell at your pharmacy for 89 cents. In bulk, hospitals were buying them for much less than that on a regular and continuing basis. But they were in such demand after directives came out that it was a free-for-all.

It was Honeywell that said, ‘We have an idea. We’re converting some factories in Phoenix and Tijuana and there’s an opportunity for the Port of Los Angeles to get in.’ We signed a deal for millions of masks at a very attractive price that was commensurate with what we saw before the pandemic, and we were able to use that to catapult us to helping out those hospitals.

We also utilized the warehousing that is on the port complex to stage those goods for these various hospitals and other entities to have a central location to be able to pick up and distribute to their staff. It was really a great response of relationship, know-how in the logistics space and then rallying.

You keep a busy schedule. How do you stay on top of everything?

It’s challenging. It’s thanks to the efforts of our administrative assistant and our chief of staff, who really keep this department running. The travel is super heavy, because in addition to our great group of stakeholders here, our business is international. The decision-makers for how that cargo moves and what gateways they use are across the country and across the world. The largest shipping lines that we call on are headquartered in Europe and Asia. Same with the terminal operators that we contract with at the port. Major and small retailers, as well as the manufacturing sector, are our two biggest segments of cargo – about 25% each. The automotive industry, mostly based in Michigan, and their tiered suppliers in the upper Midwest and Ohio valley are also important to our portfolio. It’s important for us because people have choice today. It’s a competition every day, and being in front of those decision-makers with the latest information and problem-solving skills is why I’m on the road incessantly.

Global sea trade is a hot topic right now, with the Panama Canal’s drought-related issues and the Houthi aggression in the Red Sea. Are these opportunities for the San Pedro Bay?

We’re running at about 75% to 80% of capacity at the Port of Los Angeles. We stand ready to help the American importers and exporters keep our economy going. We are not opportunists, and we are not trying to cash in on other peoples’ misfortunes, but we stand to help. With about 30% of container trade moving through the Suez Canal being affected by those pirates in the Red Sea, I go back to my days working in the Middle East, where it was Somali interests that were hijacking boats and holding crews for ransom. The interesting thing about this time is that now the supply chain is front-and-center in the American consciousness after Covid-19 and what we all went through. 

A loaded cargo ship at the Port of Los Angeles. (Photo by Ringo Chiu)

At the same time, you’ve got severe drought conditions in the Panama Canal, where about 5% of world trade moves. The folks running the Panama Canal are doing everything possible to keep commerce rolling as well, such as making use of the Panama Canal rail authority to try to get cargo from the Pacific side to the Atlantic.

With our available capacity, we can help right now in a very difficult time, where transits are uncertain, costs are rising and, more importantly, the safety of those crews that have to traverse that geographical area is in peril.

What is it like to operate in a landscape where the Gulf and East Coast ports are more competitive than they used to be?

If you’re No. 1 in anything, competition’s coming after you. Some have said that it’s really tough climbing the mountain; in my view, it’s tough to stay there. We’ve been the No. 1 container port in the U.S. for 24 consecutive years through a lot of hard work, but we have seen our market share diminish over the past 20 years for a variety of issues. It costs more to do business in California, across the board in many industry segments. We’ve got a complex labor landscape. We had a very long contractual negotiation with our dockworkers, and thankfully they came out on the better end of that. We’ve got workers that are underrepresented in some cases. There are jobs that go unfilled because it’s a challenging job market across the United States to this day. We’re not immune from that in Southern California. We’ve also been known to have a very strong regulatory framework in California that, quite honestly, gets people nervous. We’ve got the most polluted air basin in the nation, and we’ve got to do everything we can to improve that. But, when folks think about how that is going to get fixed, some people don’t want to wait for that. That’s how cargo moves.

In the East and Gulf coasts, they have hired absolutely switched-on leaders at these ports. The federal government has out-invested the west coast ports at a rate of 11 to 1 over the last decade – $11 billion going to East and Gulf coast ports to a little more than a billion out west – and that’s because mainly those states have banded together. It becomes very powerful when four, six, eight U.S. senators go to Washington campaigning for the interest of their ports.

You’ve discussed many times how the port and shippers are eager for all of the infrastructure improvements to come. Tell me about how the local residents are going to be feeling these impacts and what it’s going to mean for them.

This is central to our thinking. At our state of the port speech in January, we talked about our big pillars of focus: community, environment, jobs and cargo. For decades there have been impacts based on pollution, noise, rail and trains going through, trucks driving through neighborhoods. All of that is improving, but the work is not done yet. The migration to zero emissions to reduce pollution is job number one in our view, but more cargo here means more jobs, and with such a strong component of local and community workers here, that’s very important.

In 2015, we created the port’s Public Access Investment Plan, because many in the community told us they wanted the port area to undergo a beautification strategy, wanted access closer to the waterfront and wanted retail, dining and entertainment. They also wanted us to invest in nonprofit groups to help propel the communities and to help create job training and education. Fully 10% of our operating income goes to the community efforts, mostly on the infrastructure side, but also to these other areas.

Cruises were obviously one of the major sectors heavily affected four years ago. How has that rebounded, and what’s in store for that industry?

The cruise business has come back with a roar after Covid. What we saw last year was epic – nearly 240 cruise departures, the best since 2008, and 1.3 million passengers that enjoyed the Port of L.A. for their oceangoing vacations … also the best in two decades. The investment will continue in the cruise business so much so that we’ve released a bid for a new cruise terminal at our outer harbor so we can help the industry grow.

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