LA won’t give carriers rebates this time

   In 2009, as liner carriers struggled with a historic drop in container cargo demand, the Port of Los Angeles lent a hand of support.
   Los Angeles gave carriers a 6 percent rebate on the fees they paid the port – around $35 million in total – as a goodwill gesture to customers in a time of crisis.
   Carriers shouldn’t expect the same treatment this year.
   “We’re watching carriers doing the same thing that they did a few years ago, which is bring too much capacity on line,” Port of Los Angeles Executive Director Geraldine Knatz said in a conference call Monday with American Shipper’s editorial team.
   More than two years ago, the port authority trimmed its own budget so it could provide relief to its carrier customers during the global recession so they could survive the global recession and resulting downturn in international trade.
   “This time, we’re not doing that. We kind of tightened our belts because their success is our success,” Knatz said. “But to see the carriers do the same thing in terms of water capacity, I just don’t get it.”

Knatz

   Knatz said recent meetings with customers in Asia and in the United States have led her to be downbeat about the prospects for container volumes the rest of this year and in 2012.
   “The outlook is grim. The volume is not there,” she said. “They’re telling me they’re very concerned. There are always cycles, but they’re coming fast and furious.”
   She said the port is working with exporters to bring more outbound volume to somewhat offset static inbound growth.
   Knatz’s appointment in 2006 to the top spot at Los Angeles heralded an era in which Los Angeles and Long Beach have worked closely on projects to improve cargo security and reduce carbon emissions associated with container handling. Knatz previously served under former Port of Long Beach Executive Director Richard Steinke, who retired on Sept. 30.
   More recently, the two ports, along with others along the U.S. West Coast, have been banding together in a “Beat the Canal” drive to ensure West Coast gateways keep their competitive edge for discretionary cargo after the Panama Canal widening is complete in 2014.
   But Knatz said there remains a healthy competitive battle between the two Southern California ports.
   “There were times when the two port directors didn’t talk to each other,” she said. “A lot of [the better relations today] had to do with the fact that Dick and I knew each other well. I’m very interested in who becomes next director at the Port of Long Beach. I hope it’s someone I can retain that relationship with.
   “But there’s still competition going back and forth. One upsmanship sort of stuff. That’s always going to happen. One of my goals is to remain No. 1, so I’ll steal as much cargo as I can.”
   Knatz pointed to a deal this year in which Hyundai sublet part of APM Terminals’ massive Pier 400 terminal, luring the Korean carrier away from Long Beach.
   “I never would have thought that would have happened,” Knatz said. “What was interesting about that was this idea of a terminal within a terminal. I consider it a big win for us.”  — Eric Johnson