Successful port strategies call for investment, flexibility and collaboration

NRF Supply Chain 360: Executives from the ports of Cleveland, Houston and Los Angeles discuss the 21st century supply chain

The NRF Supply Chain 360 conference and expo was held in Cleveland from June 20-21, 2022. This event explores the modes and methods needed to build a stronger, more sustainable supply chain and ensure resiliency in challenging times. Learn more about the conference here.

Top leadership from ports in Houston, Cleveland and Los Angeles took the stage for the NRF Supply Chain 360 operations session, “Preparing ports for a 21st century supply chain.” Despite the common challenges of the pandemic, they described vastly different experiences in their operations.

The session featured Eugene D. Seroka, executive director of the Port of Los Angeles; Thomas Heidt, chief operating officer of Port Houston; and William Friedman, president and CEO of the Port of Cleveland. It was moderated by Gregg Barta, executive vice president, supply chain and logistics with Kohl's Corporation.

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In Los Angeles, for example, there’s been a glut of news helicopters flying overhead, reporting on the backup of shipping containers. But there’s also awareness that if anyone had known what was coming and positioned skilled labor, assets and real estate accordingly, the port could have been in better shape. There’s the challenge, too, of becoming a zero-emission port by 2030 and zero-emission heavy duty truck port by 2035; the belief is there, Seroka said, but not yet the technology needed. Some 18,000 trucks need to be replaced in Los Angeles and Long Beach.

“Our job,” he said, “is to create a market and give confidence to these manufacturers that we can be a good customer broadly, get other ports involved and other private-sector folks, so we can build a market that will be sustainable for these manufacturers, so they keep pumping capital in R&D, pushing technology to its limits and finding other folks to invest in this, to really push forward and get these rigs and pieces of equipment commercially on the ground.”

In Houston, the port had luckily built out a 100-acre piece of property to “stay ahead of the eight ball.” Without that, Heidt said, “we would have been in a heck of a lot more trouble than we were — or we are.”

The port saw a good portion of its older labor retire during the pandemic, so there’s been time and effort spent on training new workers for current operations and future growth. Normal annual growth pre-pandemic was 8 to 10 percent, Heidt said, but “last year was up 15 percent. This year’s up another 20 percent. Those are numbers that make it very difficult with the other pieces of the chain not being up to par.”

There’s also the fact that the 52-mile ship channel includes about 200 private oil and gas facilities. Port Houston only owns eight facilities; they’re developing teams of the major players along the channel to help build a workable projects and solutions for the entire region.

And in Cleveland, conversely, there’s fluidity, capacity and a desire to reposition the port. “We’re a very different sort of port in terms of the mix of commodities we handle,” Friedman said. “We’re just getting into the world of container transportation, which I know seems rather shocking in 2022. But the Great Lakes-St. Lawrence Seaway, which is the routing in here to Cleveland from our oceans, really was bypassed by the container lines … . We’re trying to shift that trajectory, and we’d like to be a reliever for the very large ports that are up on stage with me today.”

Friedman’s view is that “we need all of the above. We need our major gateways, we need to keep investing in those, they need to be fluid. But we also need, I think, to distribute the cargo through more ports here in the U.S., look for some alternatives. The Great Lakes-St. Lawrence Seaway, particularly for Europe, and maybe even for Asia cargo, and for exports, is a good one. It’s really a squandered asset, and we’re trying to talk to our elected officials about changing some policies that would potentially open up the market for us, and getting steamship lines to look at us differently.”

Despite the variations in experience, the panelists talked about the ongoing need for greater collaboration and insight: Seroka spoke of getting away from “the fear of sharing data,” understanding that business rules could be set around it, and that it could be used to benefit all.

The latest effort to initiate data sharing is the Freight Logistics Optimization Works program from the U.S. Department of Transportation in conjunction with the Supply Chain Disruptions Task Force. Heidt, meanwhile, mentioned the benefits of terminals being able to receive manifests and knowing inland distribution points to better segregate cargo.

As conversation turned to what might happen this fall, the audience laughed. And the panelists, in turn, shifted to predictions for the Cleveland Browns. “Unlike Gene, not knowing what the Browns are going to do,” Heidt quipped, “I’m from Detroit. I know what the Lions are going to do.”

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