Newly appointed Port of Long Beach Executive Director Mario Cordero spent time with the Business Journal to discuss the outlook for one of the region’s biggest economic drivers. Here are edited excerpts of the interview:

Can you shed light on priorities and challenges you’ve identified at the port?

My priorities stem from my time at the (Long Beach Harbor Commission). We’re going to continue with sustainable development and we will continue to grow our business here. We’re a business-friendly port, and we want to continue to work on our relationships with terminals, shipping lines, freight owners and all stakeholders. Challenges at the Port of Long Beach are no different from the challenges at any other major container gate. Challenges are the question of competitiveness. When I was on the commission years ago, we talked about – what if Panama Canal does XYZ? What if East Coast ports are successful in their infrastructure? And more. Well, it’s 2017, and these are not what-ifs anymore, they’re here. The Panama Canal expansion project has been completed; East Coast ports are now receiving some of the larger vessels they weren’t capable of 10 years ago. So, the challenge for us is to continue being a gateway for trans-Pacific cargo coming into the U.S. I’m optimistic that we can protect our market share – we’ve invested significantly in capital improvement projects.

Capital improvement projects such as the Middle Harbor Project?

Yes – capital improvement projects to the tune of $4 billion over 10 years. You mentioned one – Middle Harbor. We also have the construction of the Gerald Desmond Bridge going on, better rail infrastructure to improve inland connectivity for the movement of goods. Cost is a big factor for a lot of the supply chain community, but so is reliability, and that’s where we come in – by making sure cargo moves efficiently through the Port of Long Beach.

The Port of Los Angeles – your neighbor – is testing a pilot program that centralizes data from different stakeholders in an effort to move cargo faster. It’s the first port in the country to work on something like this. Is the Port of Long Beach taking similar steps?

During my time at the commission, we did a port congestion study and part of that was asking what is it in the supply chain that we need to enhance for the movement of cargo. And part of that answer is the sharing of information. The portal concept like you referenced is essential for U.S. gateways. The Port of Long Beach thinks that it’s very much a priority. And, to put it in context, this industry – the goods-moving industry as a whole – was behind with regards to the implementation of technology.

Is the Port of Long Beach working on something similar?

The Port of Long Beach has been working on making those issues easier, assessing where we are and moving toward accelerating what we need to do on many fronts. The great news for me is that I joined a leading port. The Googles, the Microsofts, they’re leaders for a reason in their fields. They continue to improve and that’s what I intend to do here.

China accounts for the bulk of goods that come through the port – how do you maintain a good relationship with that country amid the steady diplomatic tensions at the federal level of late?

Over several decades, we’ve always seen tensions with regard to higher leadership in the U.S. regardless of party affiliation. It goes beyond international trade – there are other aspects. We’ve had imports grow despite the tension and despite the dialogue we’ve had in the country this year. I don’t think the tensions are going to have much impact on the two countries collaborating on matters of mutual interest. As far as Long Beach is concerned, we’re having a forecast of 7 percent growth. If you were to say that number last year, there were people who’d have debated with that.

What are your thoughts on President Donald Trump’s decision to take the U.S. out of the Trans-Pacific Partnership agreement?

That debate about the TPP was there before President Trump took office. What you’ve seen in the last few years are big debates on free-trade agreements, and that will continue. I was a supporter of the TPP because I believe in free trade, and I think the Obama administration raised the bar on those free-trade agreements. (The TPP) maximized opportunities to protect the American worker and in doing so was also cognitive of the environmental impacts in this country and other countries. Those were aspects of the TPP that were not talked more about. This was not an issue that was limited to the United States – this conversation was a global one. Suffice to say the sky isn’t going to fall with this, international trade will continue to be viable. One-third of the (gross domestic product) in this country is based on international trade. By 2029, it’s been predicted to be two-thirds of our economy.

What about plans to renegotiate the North American Free Trade Agreement?
If you ask people in Canada and Mexico, I think people in those countries don’t mind sitting at the table and taking a second look at things and renegotiating. The good news is the operative word: renegotiating. We’re not talking about throwing it out of the window here or eliminating it. That was a conversation a year ago, maybe. NAFTA is very important for this country and for the Americas. It’s important for the U.S., for Canada, and certainly Mexico. I’m optimistic and just like any other agreement that’s out there, it’s not a bad idea to sit at the table and take a second look at things.

You were a harbor commissioner for Long Beach from 2003 to 2011. How is the executive director’s role different?

No. 1, the fact that I had that unique experience as a former commissioner, I think gives me great perspective as an objective director. The difference is that the greater policy issues are within the purview of the commission. So, in many areas, we need to get direction from the commission in terms of policy issues – where the Port of Long Beach should be. As executive director, I manage a staff of 540-plus people, and our job is to make sure that as a port authority we address our mandate, including the operation of the Port of Long Beach itself, and making sure our tenants have maximum opportunity to grow their business.

Speaking about policy involvement, you spearheaded the port’s Green Port Policy as a member of the commission. Then you spent six years in Washington. How have the green initiatives fared so far?

January of 2005 was the formal implementation of the Green Port Policy. I was fortunate to be on the commission back then, when we identified the need to do this. It was a move forward toward sustainable development. Back then, in both (the ports of) Long Beach and Los Angeles, there (were) some serious emission issues that were harmful to the community. That has substantially been mitigated given the initiatives of the commission back then. We’re continuing the drive to reduce emissions. The governor has set some standards regarding truck emission, which would basically set the standards to zero-emission situations. The goal isn’t to reduce emission, which we’ve done significantly, but to remove emissions.

How do you maintain relationships with trucking companies whose businesses are affected by these environmental policies?

A good thing we have right now is a good relationship with stakeholders – and the reason is that we’ve been through this before. The Green Port Policy, the 2006 Clean Air Action Plan were initiatives that involved engagement with stakeholders to achieve our mutual objectives. We will continue to do that; we will work with the trucking industry to meet the worthy goals and continued quest to reduce emissions. In the past, we’ve provided incentives to work with the trucking industry. (Editor’s note: On June 15, a group of independent truckers and warehouse workers announced their intention to strike on June 15 due to costs associated with the zero-emission mandate).

You left the port in 2011 after being appointed to the Federal Maritime Commission by President Obama. What did you do there?

The mission is to foster fair, efficient, reliable waterborne international transportation. It also licenses the ocean transportation intermediaries, the freight forwarders. One of the first things we did in my time as chairman was wrap ourselves in the issue of congestion not only at the port gateways in the U.S. but in the international communities.

The shipping industry has been struggling the last few years, reporting cumulative losses between $3 billion to $5 billion in 2016. On April 1, we saw three global shipping alliances form to cut costs. How has that affected business at the port?

The positive impact for Long Beach – and this goes back to our infrastructure investment – is the Middle Harbor Project. When it completes the last phase in late 2019, it will have the capability of accepting 20,000 TEU (20-foot-equivalent) containers. The alliances came about due to economies of scale. Shipping lines have struggled to come out of the Recession since 2008. At least for the carriers, we’re on our way to recovery. The data for the last two months is telling. April was a 15 percent increase in container movement year to year for the Port of Long Beach. We saw the strongest May in the movement of containers in the history of the port. So, you’re beginning to see the positive impacts of these alliances coming in with larger vessels and more cargo. When I left the port as a commissioner in 2011, the largest vessel we had received was around 8,000 TEUs. Just six years later, these vessels are now 18,000 TEUs and growing.

Is the shipping industry on track to see a profit this year?

Yes, based on experts and what I’ve read. The losses have been so great that any kind of profit this year would be widely lauded. Every May we also see contract negotiation between the carriers and freight owners. This year the carriers are on track to raise their rates, which will be beneficial to them. So, you’ll see profit margins increase for the carriers going forward.

But having ships carry goods for other carriers must have an effect on work flow, right?

The alliance structure is not new – this has been the case for many years. But yes, these alliances are sharing more containers and the rising number of containers going into terminals does create congestion issues and equipment availability (issues) as well. The good news is that the terminal operators have adjusted, and we’re moving forward now to address those situations.

All of this comes in wake of the bankruptcy of Hanjin Shipping Co. How has it been for Long Beach since you lost your largest tenant?

Hanjin did affect us, but we’re moving forward and our cargo numbers have rebounded. What happened to Hanjin was no surprise to the industry. When I left the port six years ago, there were 25 major international carriers. Now there are 13, but really 10, because of the culmination of the merger of the three Japanese carriers. No surprise that carriers were having challenges and some would be out of business.

What are your thoughts on the current labor negotiations at the port?

The principals at the table have agreed to extend the current contract, and I understand we’re waiting for the (International Longshore and Warehouse Union) to vote. The expectation is that it’ll be approved. That will do a couple of things – it will enhance confidence among the shippers that there’s not going to be any type of labor negotiation that’s going to result in what happened a couple of years ago. It will provide stability. The port isn’t at the table when it comes to these negotiations, but (the 2014 strike) was an eye-opener. These are all lessons learned. The priority here, whether you’re a union, a terminal operator, etc., is to move the cargo.