At the SteelOrbis and the American Institute for International Steel's (AIIS) Steel West Coast event on January 11, 2012 aboard the Queen Mary in Long Beach, California, John Foster, President and CEO of Coutinho & Ferrostaal's North American division as well as Chairman of the AIIS, cited that "2011 is rapidly becoming a shadow in the rearview mirror"; but looking back, "trade and steel was alive and reasonably well" last year. And 2012 is already shaping up to be a better year, with steel trade shipments anticipated to be up 5 to 10 percent this year.
The Logistics Panel quickly commenced following Foster's introduction, and included Ron Popham, Principal of Maritime for the Port of San Diego; Marcel van Dijk, Marketing Manager for the Port of Los Angeles; and Jeff Bergin, Senior Vice President for Pasha Stevedoring, and was moderated by Rich Brazzale, General Manager--Commercial Operations, for Coutinho & Ferrostaal.
Brazzale explained the importance of the port system, noting that one-third of the US' GDP goes through ports, and while each port has its own personality, they "all have the same basic need: maintaining adequate funding."
Popham then discussed the Port of San Diego, and how it was created by the state legislature and is also the only five-city port in the US. It is the largest facility on the West Coast distributing windmill components and it's a major auto import port as well.
Next, van Dijk noted that the Port of Los Angeles is the largest container port in the US, with the Port of Long Beach coming in second; the Port of Los Angeles is also the largest steel port on the West Coast, handling an average of 2.2 to 2.8 million metric tons (mt) of steel annually. The port's biggest year was in 2006 with 4 million mt; but that number fell to under 1 million mt in 2009, was approximately 1.5 million mt in 2010, and 2011 is expected to end at just under 2 million mt. The port faces a number of difficulties, however, as it is "not the cheapest port to handle any cargoes" for two reasons: high labor costs and lease policy.
Bergin echoed van Dijk's sentiments regarding the lease costs at the Port of Los Angeles--it costs $165,000 a day for the lease. "One challenging factor is the expense of what takes place on the West Coast," he said. In the next five years, Bergin predicted an approximate 20 percent drop in container volume on the West Coast.
The panel then discussed the impact of the expansion of the Panama Canal and the effect it will have on steel/breakbulk shipments on the West Coast. All three panelists were not majorly concerned of the impact on West Coast ports, although the Port of Houston, Texas and the Port of Lazaro Cardenas, Mexico are cheaper ports and they have less expensive rail rates nearby. Van Dijk conceded that some activity will move to the East Coast and Gulf, but it won't be "the big shock people think it will be." The effect also won't come immediately after the expansion is completed in 2014, but later on.