In the end, the allure of running the whole shooting match at the Port of Oakland was strong enough to persuade J. Christopher Lytle, the executive director of the Port of Long Beach, to jump ship.
Lytle, 67, surprised virtually everyone late last month when he announced he would leave the nation's second busiest port in mid-July to run the Port of Oakland, Oakland International Airport, and the facility's real estate operations.
For Lytle, a maritime veteran, this represents his first crack at running an airport. The added responsibility was a key factor in his decision to take the Oakland post, he said. "I wasn't out there looking for a job," he said, noting that he was approached about the position.
Lytle's last day at Long Beach is July 19, and he expects to be running Oakland on July 22. The five-member Long Beach Board of Harbor Commissioners is soon expected to elect an interim replacement.
Lytle worked in Oakland from 1992 to 1995 when he ran then Sea-Land Service Inc.'s West Coast operations at the port. When Lytle leaves Long Beach, he will have been there nearly seven years. He was named executive director in November 2011.
In an interview, Lytle said he will work to convince businesses that Oakland should be the first West Coast port of call for import traffic. To do that, he will push for improvements to on-dock rail service, he said.
Lytle's said one of his priorities will be to lessen the port's near total-reliance on containerized traffic by diversifying into areas like break bulk and even dry bulk. Oakland is one of the few U.S. ports that processes more exports than imports, a trend that Lytle wants to promote. Oakland benefits from its proximity to California's verdant Central Valley, a mecca for foodstuffs that are in increasing demand from export markets.
Lytle will move from a port that handles slightly more than 6 million twenty-foot equivalent units (TEUs) a year to a port that handles about 2.4 million TEUs annually. At the same time, Oakland's smaller size means its terminals are less congested than Long Beach's, giving Lytle and his team more room to be agile, he said.
Lytle said he has no plans to turn Oakland into the Long Beach of the north. Instead he will, among other things, promote Oakland's capabilities to customers whose cargo requires specialized handling.
Lytle said he is looking at converting a nearby army base into a distribution center to encourage the practice of transloading that has gained popularity down the coast. At the ports of Los Angeles and Long Beach, the nation's busiest complex, fewer containers are being loaded on intermodal trains for direct transit inland. Instead, they are trucked to a distribution center in the nearby Inland Empire to the east, where they are transferred to a 53-foot domestic box for delivery to a local DC and then onward distribution to the customer.
On the labor side, Lytle, like other West Coast port managers, faces the specter of contract talks next year with the International Longshore & Warehouse Union (ILWU), a 59,000-member union that represents virtually all of West Coast waterfront labor. The contract with West Coast ports expires June 30, 2014 but talks are expected to begin in early spring.
Lytle got a taste of the ILWU's influence late last year when a skilled clerical unit of the union struck at the Los Angeles/Long Beach port complex for eight days. The picket lines were honored by ILWU dockworkers, paralyzing operations are the Port of Los Angeles and dramatically curtailing business at adjacent Long Beach.
LONG BEACH'S FUTURE
Lytle's departure comes at a critical time for Long Beach. The port is facing increased competition for Asian imports from Vancouver, British Columbia's Port of Prince Rupert, and Mexico's Port of LÃ¡zaro CÃ¡rdenas on the country's Pacific Coast. Prince Rupert touts itself as the fastest way to deliver goods from Asian producing markets to U.S. consuming points in the Midwest and mid-South. LÃ¡zaro CÃ¡rdenas is promoting itself as a better alternative to Long Beach for getting Asian goods into the vast Texas market. This is especially true after Kansas City Southern, the exclusive rail provider between LÃ¡zaro CÃ¡rdenas and the United States, made track improvements that promise shippers and beneficial cargo owners (BCOs) equivalent service at lower costs.
Long Beach also faces lingering concerns that the opening of the expanded Panama Canal in 2015 will divert Asian import traffic from West Coast ports—where goods are railed or trucked inland—to the Canal as part of an all-water route to Eastern ports. Lytle shares the belief held by many that most of the diversion from West to East has already occurred, and any further shift will be incremental, if it happens at all.
Long Beach is in the second year of a multibillion-dollar program to upgrade its facilities. It is spending $1 billion to expand and improve its on-dock rail capabilities. It is nearly two years into a nine-year, $1.2 billion project known as the "Middle Harbor" container terminal, designed to renovate and combine two aging container terminals into one modern facility.
In April 2012, Hong Kong-based ship line Orient Overseas Container Line (OOCL) signed a 40-year, $4.6 billion lease to be the terminal's sole occupant. It is the largest deal of its kind in seaport history, according to the port. The terminal will also have the most sophisticated IT system ever installed at any port, Lytle said in an interview in March of 2013.
Lytle also leaves behind more than his share of headaches. Issues like cost, congestion, and labor strife are ways of life at the San Pedro ports that shippers and carriers have grown accustomed to. Including last year's clerical workers strike, three labor-related disturbances have plagued Long Beach in less than 11 years.
Another headache appeared Wednesday when the city of Long Beach sued to prevent the city of Los Angeles and BNSF Railway from moving forward on a $500 million rail yard project. The City of Long Beach says the project may jeopardize the health and quality of life of its residents.
Long Beach leaders are also asking the courts to set aside Los Angeles' recent approval of the Southern California International Gateway (SCIG) project and its environmental impact report, which Long Beach says does not comply with the state's Environmental Quality Act.
Long Beach said the negative effects of the project would be borne almost entirely by residents of West Long Beach.