To position the U.S. economy for long-term competitiveness, we need to embrace public-private partnerships and technology that will bring transportation infrastructure into the 21st Century, according to Port of Los Angeles Executive Director Gene Seroka.
At a time when more than 60 percent of American households are Amazon Prime members, we may be entering into a Golden Age of consumer convenience. But much of our nation’s infrastructure – the roads, railways, bridges and ports required for Amazon and others to get products to end-users – is outdated and prone to bottlenecks and other delays.
To position our economy for long-term competitiveness, we need to embrace public-private partnerships that will bring our transportation infrastructure into the 21st Century.
Our nation’s transportation infrastructure woes are long-standing and well-documented, despite standing out as an issue with bipartisan support in Washington, D.C. And rightly so; U.S. manufacturers account for half the imports that depend on our nation’s infrastructure. The same antiquated freight system is also seen as an impediment to bolstering our nation’s export capability. Add in the Amazon-induced surge in e-commerce shipments to an already strapped system, and we’ve reached a major inflection point.
Freight infrastructure impacts on the supply chain are a daily concern at the Port of Los Angeles, the nation’s busiest gateway for containerized trade. Here, an array of shipping companies, operating systems, railroads and trucks interact through high levels of collaboration and planning to keep the cargo moving in and out of the port complex. However, digitization of key cargo data can improve the system even more.
In LA and other ports, terminal operators typically receive cargo data 48 hours in advance of arrival at the docks. Given that 90 percent of global trade moves on the ocean, the impact of even a brief delay in processing this freight is significant for both large and small businesses. Precisely because of this issue, at least two major retailers have signaled their intentions to fine suppliers whose shipments arrive late or early.
How do we harness the power of digital capabilities to maximize freight movement across U.S. infrastructure? Big data can be part of the solution. To date, tying digital technology into our nation’s freight infrastructure has not been a commonly pursued consideration.
But that appears to be changing.
To keep pace with the rapidly shifting inbound and outbound cargo movements, operations at our ports must evolve. That’s why the Port of Los Angeles has developed a partnership with GE Transportation to digitize maritime shipping data and develop an information portal that is available to cargo owners and supply chain operators. The goal of the initiative is to improve data flow between cargo owners and their service providers, giving them an extended window of time to track and process shipments, more effectively service ultra-large container vessels, optimize cargo movement and improve the predictability and reliability of their supply chains.
With container volumes on the rise, we are moving more cargo than ever, making the need for operations optimization even more critical. As we expand usage of the enhanced portal capabilities we introduced with our digital solution, we anticipate efficiency gains of between 8 percent and 12 percent.
As a result, the Port of Los Angeles and GE Transportation have signed a commercial agreement that extends our partnership for five years and enables us to expand the solution to all terminals and carriers port-wide. It’s a critical step toward exploring how a system like this could be developed and implemented at other ports.
This technology can and should be scaled both domestically and internationally because a data-informed global supply chain is essential for U.S. trade competitiveness. Imagine if similar digital infrastructure improvements were made at other major ports across the United States. Among other benefits, it just might help ensure your Amazon packages show up on time.
Gene Seroka is executive director of the Port of Los Angeles and member of the U.S. Department of Commerce Advisory Committee on Supply Chain Competitiveness, U.S. Department of Transportation Bureau of Transportation Port Performance Freight Statistics Working Group, U.S. Maritime Administration Marine Transportation System National Advisory Committee, and Federal Maritime Commission Supply Chain Innovation Team.