2020 Committee’s merger proposal turned away by Port of Long Beach

2020 Committee’s merger proposal turned away by Port of Long Beach

LOS ANGELES— An independently private commissioned group caused a stir earlier this month when they released a report proposing a merger between the Port of Los Angeles and the Port of Long Beach.

The Los Angeles 2020 Commission, a collection tasked with examining the fiscal stability and job growth in Los Angeles, suggested a plan to unify the county’s largest and second largest ports in its report, “A Time for Action.”

“Los Angeles and Long Beach should parlay their individual successes into a combined port to enhance their overall competitive position—a one-two punch, if you will,” the report recommended. “Why? For starters, the share of the nation’s goods handled by our region has dropped more than 5 percentage points in the past 10 years…which accounts for more than 60,000 jobs and has in excess of $100 million in revenue. We should fight to bring those jobs and tax revenues back to Los Angeles.”

Opposition from the Port of Long Beach regarding the suggestion has been considerably strong. Doug Drummond, the president of the Long Beach Board of Harbor Commissioners, expressed shock at the proposal.

“Simply put, this is a bad idea,” Drummond said. “The Port of Long Beach is not interested in a merger with our neighbor, the Port of Los Angeles. For more than 100 years, the two neighboring seaports have grown and thrived, side by side, run by separate port authorities.”

Representatives from the commission, which is comprised of roughly a dozen business and civic leaders, did not return interview requests.

“From the Long Beach perspective, there doesn’t seem to be a good reason to propose something like this,” said Art Wong, a spokesman for the Port of Long Beach.

The report, which calls the ports the busiest in the Western Hemisphere, said the duo “should be competing with ports in other regions, not with each other” and that they should “enter into a Joint Powers Agreement to manage future strategy and direction as well as capital planning and rate-setting.” The group references collaborative efforts with ports in New York and New Jersey and Tacoma and Seattle.

According to Drummond, both partnerships were encased in entirely different situations, citing a change in containers which compelled New York to receive rail and highway support from New Jersey.

“I don’t care where you stand on the battlefield, you think what you see is what is going on and sometimes you don’t know what is going on in the rest of the battlefield,” Drummond said. “That’s how I see this. They got information from a few people that had a skewed approach and they don’t get it. I still want an opportunity to speak.”

Phillip Sanfield, a spokesperson and a director of media relations for the Port of Los Angeles, said no representative from the commission has contacted him and the Port has no affiliation with the group.

“We are open to discussing anything that may bring more jobs to the San Pedro Bay complex,” Sanfield said. “Both ports have collaborated on a variety of issues in the past.”

Drummond said when he became president in mid-December, he had an opportunity to sit in on the Los Angeles chamber. In his first meeting, he received information regarding the 2020 plan.

“I thought ‘Whoa, I’ve never heard of it, what is this? I made some discrete inquires overtime,” he said. “I was new and I wanted to be delivered about what I approached. Then I asked to be heard by 2020 Plan Committee. I asked several times. I was not heard.”

After speaking with former California Gov. Gray Davis, Drummond said he has requested an opportunity to address the situation. He said the investment Long Beach has made over the years, along with public risk, has made the port number one in the county 14 of the last 16 years.

“We deal with a lot more dry bulk and liquid bulk than L.A.,” Drummond said. “They beat us a bit on containers, but if you talk about tonnage, we’re ahead of them. Then on top of that, we’re the most profitable port in the county. We really do well. And we’re investing 4.5 billion right now in new facilities for the port. We’re beneficial to the city as a job maker. The transfer from the port helps with the public beaches and tidelands and everything else. We are the prize of the city of Long Beach.”

Drummond added that a recent hurdle for the two ports is the increase in progress from Canadian ports due to Congress’ passing of the Harbor Maintenance Tax, which is a $130 charge for every 40 foot container. Cargo is shipped to ports such as Vancouver and moved by rail to Chicago, thusly avoiding the tax.

“In the Harbor Maintenance Tax, we contribute about almost $1 billion,” he said. “We get back about two percent. If we were to get back a significant portion of that tax that we pay, we could improve that last few miles of rail connection and really become efficient.”

Nonetheless, Drummond said the Port of Long Beach has no interest in discussing a merger.

“Why would we ever sit down?” Drummond said. “According to federal law, the federal maritime commission says we have to compete. We cannot collaborate. That would be unlawful…We already collaborate tremendously. We collaborate by co-owning the harbor belt railroad. We collaborate on the Alameda Port. We collaborate on security. We collaborate on clean air, clean water. We collaborate, but we have to compete.”

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