2013 Focus On International Trade
The Long Beach Business Journal presents the 2013 Focus On International Trade, highlighting the ports of Long Beach and Los Angeles.
IntTrade_Covers_042313.indd 1 4/19/13 2:13 PM IntTrade_Covers_042313.indd 2 4/19/13 2:13 PM 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 1 2013 Focus On International Trade Long Beach Business Journal Page 1 Looking east, from the Port of Los Angeles to the Port of Long Beach. The San Pedro Bay ports are the busiest container ports in the Western Hemisphere. (Photograph by the Business Journal’s Thomas McConville) Economists Say San Pedro Bay Ports On Track For Stable Import, Export Growth In 2013 ■ By TIFFANY RIDER Senior Writer hile the Long Beach-Los Angeles region is gaining economic stability, mirroring domestic demand across the U.S., the sequester effects are a potential cog in the wheel. At the same time, economists expect deceleration in container traffic through the San Pedro Bay ports in the latter half of 2012 will translate into slow export growth in 2013. The San Pedro Bay port complex – the largest container port complex in the Western Hemisphere – handles in the majority of containerized imports and exports for the United States. “The ports of Los Angeles and Long Beach are a critical part of the economy,” Mark Vitner, senior economist for Wells Fargo, told the Business Journal. W “The port complex feeds into a number of other areas, such as transportation and logistics,” including warehousing, distribution, rail and trucking businesses. “It also provides employment for many blue-collar workers; an area where we’ve lost a lot of jobs,” he said. According to the Los Angeles Economic Development Corporation (LAEDC), the ports of Los Angeles and Long Beach held onto their rankings as the top container ports in the U.S. during 2012, handling about 14 million containers among the two. More than 40 percent of the nation’s imported containers came through the port complex last year, a year marked by what an economic report released by the LAEDC in February called “a mixed bag of results.” While the year started strong, the second half of 2012 saw a reduction in exports that decelerated trade numbers. While demand had been improving in Asian countries, Vitner said that the ports’ biggest trade partner – China – is experiencing an economic slowdown. “It’s not so much that we saw a huge fall off,” he said. “We just lost some of that momentum.” Wells Fargo released a report in April about the California economic rebound, explaining that it looked like demand from China was reviving. “Looking forward, export growth is likely to remain slow for a while,” Vitner said. Richard L. Drobnick, director of USC Marshall School of Business’ Center for International Business Education and Research, agreed that growth in China is projected to be slower this year than last year. Drobnick told the Business Journal that because China will slow down somewhat, other countries in Southeast Asia will slow down. “Indonesia will slow down a bit,” he said, which will likely result in less demand for consumer goods and durables. “All of our markets in Asia will slow down as China slows down.” The best and safest bet on exports from the twin ports is in energy, specifically clean energy, Drobnick said. “Energy bets are long-term,” he said. “They are not concerned with this year or coming years.” Most of the export slowdown in international trade is in commodities like iron ore, according to Vitner. “I was a little taken aback because the only areas seeing strong growth are things related to the energy business,” he said. What won’t slow down in California is clean technology exports to China and Southeast Asia, Drobnick said, with de(Please Continue To Next Page) Inside Focus On International Trade 1 Economists Say San Pedro Bay Ports On Track For Stable Import, Export Growth In 2013 3 Port Of Long Beach Executive Director Christopher Lytle: ’We’re Pretty Bullish About This Year ...’ 6 Port Of Los Angeles Executive Director Geraldine Knatz: ‘The Competitive Landscape Is Changing . . .’ 8 Los Angeles, Long Beach Harbor Commissioners Tackle Big Issues For Country’s Top Ports 9 Microsoft Official Bryson To Discuss Technology Trends In Global Trade At L.A. Chamber Breakfast 10 Spotlight: Total Terminals International – An Interview With Sr. VP And Chief Commercial Officer Frank Capo: ‘Long Beach And Southern California Is Where The Volume Is . . .’ 12 Approach To Sustainability At Twin Ports ‘Must Consider Environment, Community And Business’ 17 Key International Shipping Celebrates 15 Years; Focuses On Central And South America 17 SA Recycling Adds Iron Ore Export Services To Its Local Operations 18 LiNKS Diversifies Its Interpretation Services 19 Shipping Industry Executive To Speak At Long Beach Chamber Luncheon 20 World Trade Week Events Calendar May 2013/Presented By The Los Angeles Area Chamber of Commerce Cover Photograph of Pier T at the Port of Long Beach, by the Business Journal’s Thomas McConville Publication Prepared by the Long Beach Business Journal in cooperation with the Port of Los Angeles, Moffatt & Nichol and the Port of Long Beach, April 23, 2013 Long Beach Business Journal was founded in 1987 • lbbusinessjournal.com 2599 E. 28th St., Suite 212, Signal Hill, CA 90755 • 562/988-1222 Above, Crowley helps guide the U.S.S. Iowa into position last year at the Port of Los Angeles. (Photograph by the Business Journal’s Thomas McConville) 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 2 Long Beach Business Journal (Continued From Previous Page) mand influenced by government policy initiatives to clean up litter and pollution. This type of equipment is now more in demand than other U.S. exports like medical devices, Vitner said, mostly because of the global economy slowdown and competition from Europe. The economic slowdown in Europe has caused a domino effect. For example, California companies that import Asian goods used in products destined for Europe are experiencing a reduced demand. “Europeans are still sinking in the swamp,” Drobnick said, noting the French economy is likely to shrink and Germany will see minimal growth. On the imports side, Drobnick said sequestration is beginning to impact consumer demand. Individuals who have been unemployed for six months or more will start seeing cuts to assistance, and even low-income earners will have to stretch their dollars further because sequestration cuts to programs will impact services. “Consumer spending is going to be lower,” Drobnick said. Ben Hackett, principal at international maritime research and advisory consultancy Hackett Associates, LLC, told the Business Journal the sequester is the biggest fear fac- Page 2 tor in what may or may not happen to trade numbers this year. “Growth is slightly weaker, but we expect more constant growth than declines,” Hackett said. “The only danger is if this sequester gets out of hand. Who knows what will happen three or four months down the road.” For now, Hackett said projections are for 3.5 percent growth this year over last year across the U.S. Vitner noted that, while California may be faring slightly better than the nation economically, the state isn’t a driving force behind the growth of imports. “U.S. domestic demand seems to be holding up well,” he said. “GDP [gross domestic product] growth in the first quarter looks like it’s going to be close to 3 percent. Private sector growth should be stronger. That should keep imports relatively strong.” Vitner noted that the industry is approaching its busiest season of the year – summer – when companies are restocking their shelves for fall (back-toschool) and winter (holiday) shopping. While the latest outlook by the LAEDC predicts 2013 and 2014 to be positive years for global economic improvement and increased trade volumes among the ports’ partners, an updated forecast is being prepared. LAEDC’s Colin Maynard said to expect significant changes in growth projections. ■ 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 3 2013 Focus On International Trade Page 2 Long Beach Business Journal Page 3 Port Of Long Beach Executive Director Christopher Lytle: ’We’re Pretty Bullish About This Year ...’ ■ By MICHAEL GOUGIS Contributing Writer etting the containers off the ship is only half the battle. You’ve got to get the stuff inside the containers to its final destination, rapidly and in a cost-effective manner. And that is why the Port of Long Beach has on the boards massive improvements in both rail and vehicle transportation systems – when you get down to it, it’s not just about loading and unloading ships, but moving goods. The ability to do that, as well as to service the cargo ships that come to call, is what will keep the Port of Long Beach economically healthy and competitive, says Executive Director Christopher Lytle. “We take the competition very seriously. We never assume that this is our cargo, that we’ve got this business. We need to show the shippers that we offer good value,” Lytle said in a recent interview in his office. “We do that by infrastructure – it’s rail, road, bridges, upgrading the terminals, all of that. G (Please Continue To Next Page) J. Christopher Lytle joined the Port of Long Beach in 2006 as deputy executive director/chief operating officer, and was promoted to executive director in 2011. (Photograph by the Business Journal’s Thomas McConville) 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 4 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 5 2013 Focus On International Trade Long Beach Business Journal Page 5 The Green Port Gateway rail project at the Port of Long Beach is adding about six miles of track for trains leaving the port. “The more cargo that is placed on rails, the cleaner it is, the faster it is, the more efficient it is,” port Executive Director Christopher Lytle says. (Photograph by the Business Journal’s Thomas McConville) (Continued From Previous Page) You give the customer good value and that puts you in a better place.” Right now, the port is in a good place, based on the volume of cargo it is handling. Last year, two major shipping lines – Mediterranean Shipping Company and CMA CGM, two of the three largest shippers in the world – dropped anchor in the Port of Long Beach. While the total number of containers dropped slightly in 2012 to 6,045,662, the year ended on an upward arc, and that momentum has continued into 2013, Lytle says. “We had a really great year last year, particularly in the final quarter. We brought in two major lines, the second- and third-largest lines in the world,” Lytle says. “That was very good news, and the cargo numbers reflect that surge in business. We had a lot of very positive indicators as the year ended. Right now, year to date, our cargo volumes are up 26 percent. We are looking at a pretty good 2013. We’re pretty bullish about the year.” Getting the cargo from those new customers off the docks and into the marketplace has been the push behind transit improvements. Lytle gestures outside of his office window at the redeveloped International Transportation Service terminal, where containers are leaving the port on new rail lines rather than via truck. And just to the north, work has begun on the Green Port Gateway rail project, an $80 million realignment and reconstruction project that will add close to six miles of new track for trains leaving the port, Lytle says. “It allows more trackage that alleviates the choke points and allows this rail traffic to get out quicker, without any delays. And the locomotives aren’t sitting there idling,” Lytle says. “The more cargo that is placed on rails, the cleaner it is, the faster it is, the more efficient it is.” In addition, the long-overdue Gerald Desmond Bridge replacement project is underway, allowing better truck traffic over the span and allowing larger vessels to pass beneath it. Port officials aren’t overlooking the serv- ices and facilities at the water’s edge. The $1.2 billion Middle Harbor project is underway, anchored by a 40-year lease with OOCL. That deal is a keystone in the port’s future plans, Lytle says. “The implications of that downstream 10 years, 20 years, 30 years for the port are very, very positive,” Lytle says. “It means this is going to provide the port with an earnings stream. That will allow us to go in and invest in clean technologies. It allows us to do a lot of things in terms of community improvements. It will mean more money for the city ultimately. In addition to that, it creates thousands of jobs. A lot of those jobs will be for people in Long Beach.” The cargo coming through the port is shifting, in one key case back to a normal state of affairs, in another in a new direction of growing importance. Auto imports are on the rise, a result of Toyota rebounding from the tsunami that rocked Japan’s industrial capabilities. “Toyota was horrifically impacted by that disaster,” Lytle says. “They’ve dug out of that, they’ve dug out of the general recession, and now they’re doing very, very well, and we’re benefiting from that.” And while the biggest trading partner is China, Ecuador is on the list of Top 10 Port of Long Beach trading partners. “A lot of off-season produce comes up [from South America] to the California markets, including wines and other products. That’s a line of business that is starting to emerge,” Lytle says. “It’s still small, but it will become more important in future years.” While the port has made major progress in pollution reduction, more is on the way, Lytle says. At the beginning of 2014, state law will require half of the container ships that call on California ports to plug in to shore power. To meet this requirement, the Port is engaged in a $200 million construction project to wire up the berths to feed electricity to their massive visitors. “That means that on those vessels all of those giant diesel engines that run 24/7 will shut down. The clean air impacts of that are huge,” Lytle says. And the requirement has an unanticipated benefit: Older, dirtier ships will require expensive retrofitting to plug into shore power. Newer, more efficient, less-polluting ships are coming wired up and ready to go. So shipping lines will be more inclined to send their newer, cleaner ships here. And the port is offering additional cash incentives to shippers who send “green” cargo ships to call at Long Beach. Port officials know that to keep Long Beach in the shipping game, they need to stay on increasingly good terms with the surrounding community while giving ship- pers a real reason to come here. Lowering emissions is one way of staying on good terms with the neighbors; improving facilities and transportation capabilities keeps the Port of Long Beach high on the shippers’ list of ports of call. “We have the water depth, we have the cranes. This is where cargo wants to come. It’s really ours to lose,” Lytle says. “I think we’re doing all the right things. We’re investing, we’re building, we have great relations with the customer base – we never forget who they are.”■ 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 6 2013 Focus On International Trade Long Beach Business Journal Page 6 Port Of Los Angeles Executive Director Geraldine Knatz: ‘The Competitive Landscape Is Changing . . .’ cant is the United Arab Shipping Company, which is cooperating with China Shipping Container t might be the biggest single improveLines to offer three different ment in decades at the Port of Los Anservices to North America. Two geles, and you can’t see it – unless you of the lines, featuring smaller have the capability to peer through 53 feet 4,250 TEU container ships, will of ocean water and notice that in some call at the China Shipping termiareas, the port’s channels are deeper than nal at the port. they used to be. With greater competition on But the project means that the port now the horizon, the port is cognizant can handle the biggest cargo ships in the of the need to make sure it rewater, as well as the largest ones on the mains competitive, and is workdrawing boards. ing on a series of programs It’s all about providing service to the designed to make the port more tenants at the port, and at its core, that is efficient and a better neighbor to what will keep the Port of Los Angeles the surrounding communities. healthy and thriving in the future, says ExThe Main Channel Deepen- Geraldine Knatz has served as the executive director of the Port of Los Angeles since January 2006. (Port of Los Angeles ecutive Director Geraldine Knatz. ing Project, a 10-year, $370 photogrpah) “The competitive landscape is changing. million project, will allow the one-bedroom apartments. The deepening Competition is more intense. Competition port’s Main Basin, East Basin and West project was equally huge – it involved reis even more intense between Los Angeles Basin to accommodate the largest ships moving twice the material moved to create and Long Beach because of limited organic afloat, as well at the 16,000 and 18,000 Dodger Stadium. The material was used to growth,” Knatz says. “There’s a terminal TEU ships just hitting the seas – or about help build a 104-acre bird and fish feeding being developed in Mexico. And there’s to. To provide a sense of scale, one estimate habitat in the outer harbor. Canada. And then we have the (Panama) suggests that a 16,000 TEU ship – if it were “It’s probably the most significant infracanal. We’re going to have to fight harder an apartment building – would hold 2,300 structure improvement that was done over this past decade,” Knatz says. “We can get every ship, all the big ships into every area of the port now – and all the ships that are coming.” To handle the cargo that these ships will disgorge, several rail projects are underway. The more goods that get shipped by rail, the Pasha Stevedoring & Terminals excels in handling steel, breakbulk, less truck traffic, the smaller the impact on agricultural products, containers, and heavy-lift/project cargo, with the surrounding community, and the lower supporting Omni-terminal operations and expert diversification in the cost of shipping – every time you handle a piece of cargo, it costs money! So several international vessel loading. companies are “transloading” goods either at the port or in local warehouses – “unDelivering personalized solutions for faster, safer shipments. stuffing” a shipping container with, say, flat-screen TVs and bundling those TVs into 53-foot-long domestic trucking and train containers with other products. Those repackaged containers now head for several different destinations across the U.S. “More than half of our cargo goes east of the Rocky Mountains,” Knatz says. “The best way for us to move cargo right out of here is directly on rail, so we’re trying to maximize our ability to do that.” Maximizing the port’s efficiencies is the idea driving the environmental impact report for development of Terminal Island, which is set to go to the port’s board of harbor commissioners this summer, Knatz says. “It will set the pathway for development on Terminal Island,” she says. “It will provide about 200 additional acres of conPORT OF LOS ANGELES • PORT OF SAN DIEGO • PORT OF GRAYS HARBOR tainer area, it will provide a lot more rail, (310) 835-9869 / www.psterminals.com it also provides more area for trucking. At some point, there may be charging sta- ■ By MICHAEL GOUGIS Contributing Writer I to keep the businesses. And to do that, you make sure you provide the best facilities for the customers – we’re working with all the stakeholders to improve services, because all of those things become important.” In the past year, the 7,500-acre port has seen a relatively flat rate of activity, one that is projected to continue through the current year. In 2012, shipping through the port increased 1.7 percent, from 7.9 million TEUs (20-foot container equivalency units) to 8.1 million TEUs, meaning that the Port retains its position atop the list of U.S. ports in terms of container volume handled. While the activity level remains constant, and the main shipping partners remain the same, exports of grain have increased in recent months, Knatz says. “One of the things that we’re seeing is full trains of grain coming in for export. That grain is coming from the Midwest, and it’s going to Asia. I just met with Burlington Northern, and they have a strong relationship with [A.P. MollerMaersk Group], so they are bringing in full trains of grain through Pier 400.” In terms of new clients, the most signifi- Pasha Stevedoring & Terminals Handles All Cargo All The Time r of the Angeles 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 7 2013 Focus On International Trade Long Beach Business Journal Page 7 Port of Los Angeles Executive Director Geraldine Knatz at left with Los Angeles Mayor Antonio Villaraigosa during recent ceremonies marking the completion of the channel deepening project, and at right welcoming Xi Jinping to the port in February 2012, prior to him becoming the president of the People’s Republic of China. (Port of Los Angeles photographs) tions, because we’re still testing our electric trucks, there could be LNG fueling, and restrooms – which would be kind of handy on Terminal Island!” Additionally, the port is pursuing projects on the Wilmington and San Pedro areas. The Bekins building in Wilmington will be renovated into a port archive, while improvements on the San Pedro waterfront will mean the tall ships and tugboats will be moved into more visible areas, making the waterfront a nicer place to view. That relationship with the surrounding community is critical – there is no real “buffer zone” between the ports and the people who live and work adjacent to it. The best way to maintain good relationships is to minimize the port’s impact on the lives of the surrounding residents, and one good way of doing that is reducing emissions. Knatz says the port already has met and exceeded the 2014 emission reduction standards and is working with shippers to encourage them to use cleaner vessels. Last year, the port announced that several shipping lines had registered for incentives available through the Environmental Ship Index program. Shippers whose vessels emit fewer pollutants and who adopt loweremissions-producing practices and tech- nologies will receive financial rewards when those ships – and those procedures – are used at the port. Already, the port is looking toward the next set of challenges, because that is the only way it can be ready when they arrive. “Setting a goal for five years out, trying to be more resilient, trying to look at ways we can reduce energy consumption – that’s going to be the next big thing,” Knatz says. ■ 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 8 2013 Focus On International Trade Long Beach Business Journal Page 8 Los Angeles, Long Beach Harbor Commissioners Tackle Big Issues For Country’s Top Ports he following 10 individuals are responsible for guiding their respective ports through good and bad times, and for making decisions that impact Southern Californians today and into the future. In recommending their appointments, the mayors of Los Angeles and Long Beach attempt to balance the board so there is representation from business, labor and the community at large. T President Cindy Miscikowski Los Angeles Board Of Harbor Commissioners Vice President David Arian Commissioner Douglas P. Krause Commissioner Robin Kramer Commissioner Dr. Sung Won Sohn The Los Angeles Board of Harbor Commissioners oversees the management and operation of the Port of Los Angeles. The five-member board is appointed by the mayor of Los Angeles and confirmed by the Los Angeles City Council. The commissioners serve five-year terms and elections are held every July for the offices of president and vice president. The board meets every other Thursday at 8:30 a.m. President Cindy Miscikowski, who served as a member of the Los Angeles City Council from 1997 to 2005 was appointed to the board in 2009. Prior to her city council position, she served for 20 years as chief of staff for an L.A. councilman. She earned a degree in political science from UCLA in 1979. Vice President David Arian was appointed to the board in late 2010. A resident of San Pedro, he began his career as a longshoreman in 1965, has served an officer of the ILWU Local 13 many times, including three stints as local president. In 1991 he was elected international president of the ILWU. Commissioner Douglas P. Krause was appointed to the board in the fall of 2005. He serves as executive vice president, chief risk officer and general counsel in the L.A. headquarters of East West Bank. He received his juris doctor from Columbia Law School, where he was editor of the Law Review. Commissioner Robin Kramer, who has more than three decades of service to the L.A. community, joined the commission in late 2010. She is a former chief of staff to both Mayor Antonio Villaraigosa and Mayor Richard Riordan. She earned her masters in urban sciences from Occidental College. Commissioner Dr. Sung Won Sohn is the most recent appointment to the commission, joining the board last July. He is an endowed professor of economics for the Martin V. Smith School of Business & Economics at California State University Channel Islands, and vice chair of the retailer Forever 21. Long Beach Board Of Harbor Commissioners The Port of Long Beach is governed by the City of Long Beach. The City Charter created the Long Beach Harbor Department to promote and develop the port. The Board of Harbor Commissioners sets policy for the Port of Long Beach. Commissioners are appointed by the mayor of Long Beach and are confirmed by the city council. They may serve no more than two six-year terms. In June, the commissioners elect board officers. These offices are held for one year. The board generally meets three times a month on Mondays – two at 1 p.m. and one at 5:30 p.m. – and is dark the last Monday of the month. President Susan E. Anderson Wise was appointed to the board in December 2008. She is a graduate of the University of Chicago Law School and, since 1974, she has been an attorney in private practice in Long Beach. She has been an active member of the community for nearly 30 years, serving on numerous boards and commissions. Vice President Thomas Fields is a Long Beach advertising executive and former city planning commissioner and redevelopment agency chair. He was appointed to the board in December 2009. In 1996, he served on the Shipyard Reuse Advisory Committee, which devised the reuse plan that ultimately awarded the former Naval Shipyard property to the Port. Commissioner Nick Sramek was appointed to the board in July 2007. He is a senior project leader in system engineering for The Aerospace Corporation in El Segundo, where he has worked for 25 years, primarily on military satellite systems. He earned a masters in engineering from California State University, Long Beach. Commissioner Doug Drummond was appointed to the board July 2011. He served as a member of the Long Beach Police Department for 29 years, retiring as a commander in 1988. He was elected to serve two four-year terms on the Long Beach City Council. He has also authored two books. He earned a doctorate in criminology from August Vollmer University. Commissioner Rich Dines, a longshoreman at the ports of Long Beach and Los Angeles for the past 15 years, was appointed to the board July 2011. In 2007 he was elected president of the ILWU Southern California District Council. He is a former diving instructor and has been a licensed real estate agent since 2003. ■ President Susan E. Anderson Wise Vice President Thomas Fields Commissioner Nick Sramek Commissioner Doug Drummond Commissioner Rich Dines 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 9 2013 Focus On International Trade Long Beach Business Journal Page 9 Microsoft Official Tyler Bryson To Discuss Technology Trends In Global Trade At L.A. Chamber World Trade Week Breakfast ■ By SAMANTHA MEHLINGER Staff Writer icrosoft’s Tyler Bryson will share his insights into how major technology trends are shaping global trade at the May 2 Los Angeles Area Chamber of Commerce World Trade Week Kickoff Breakfast. Bryson is general manager of the Southwest District of Microsoft’s Enterprise and Partners Group. He breaks down his speech into “four mega technology trends that are impacting the rate, speed and opportunity of global trade.” He indicates the intent of the talk is to tie this discussion back to Los Angeles and its marketplace. “The first big trend is cloud computing,” Bryson tells the Business Journal. Cloud computing services, sometimes referred to simply as “the cloud,” utilize remote servers for data sharing via the Internet. “From a business perspective, it’s the shift to new, faster and lower cost ways to scale and make computing capabilities [available] to everyone.” One company that has used a cloud service to its advantage, Bryson says, is Herbal- M ife. “One of our customers in the local market is Herbalife. By using cloud technologies as opposed to relying on more traditional IT, they were able to build and deTyler Bryson ploy a system to support their large channel of distributors,” Bryson explains. Herbalife uses Microsoft’s Windows Azure cloud computing service. In doing so, Bryson says, Herbalife was “able to leverage a platform at a lower cost with a lot more speed and reach a global audience faster.” The second technological trend is mobility. “When I say mobility, most people think I am referring solely to cell phones and tablets,” he says, and acknowledges these are key elements. “But in addition to that is the world of connected devices and sensors.” He posts, “A good example might be sen- sors on a cargo or shipping container sailing across the ocean that is being monitored and managed through technology.” These sensors could measure “where they are going, temperatures, vibrations and heat.” He adds that such technology might be useful when “tracking a product that may have a certain end life, like produce.” Next on the list is social computing. Bryson finds this technology is applicable to business in regard to staying on top of “social sentiment, trends or awareness between suppliers, transportation and logistics companies.” The benefit he sees is “The idea that we could learn faster about what’s happening in real time through a social network.” Bryson is also planning to discuss “big data,” or “the way that all of this information gathered from all these sensors and devices is stored,” he says. Bryson suggests businesses utilize these trends in concert to fully harness their potential. “Having a bunch of sensors floating around the ocean is only helpful if you’ve got a place in the cloud to store it.” Similarly, he notes that having a place to store information is not useful without “data technology to an- alyze it in real time.” Social computing comes into play in sharing this data. As Microsoft’s U.S. Manufacturing and Resources Sector general manager from 2006 to 2009, Bryson says he saw this technology gain relevance firsthand. “That’s the role where I saw manufacturers starting to embrace these trends at scale. That really led to a lot of the vision and the market opportunity we see for business right now.” At that time, he says his position was in Silicon Valley’s high tech industry. “It was there that we were studying the huge supply chain issues created by a lack of information by different providers within the supply chain,” he says. “That’s how we started to look at how real time technologies could shorten the gap and latency in the supply chain.” Bryson is going to tie this issue to his presentation. “There is a huge need for real time communication, and these are the things that the cloud, big data, social networking and mobility are driving us to fix.” The event, to be held at the JW Marriott Los Angeles LA Live, marks the 87th year the Los Angeles Chamber has celebrated World Trade Week since its inception by chamber member Stanley T. Olafson in 1926. For more information, visit www.worldtradeweek.com or call Jasmin Sakai-Gonzalez at 213/580-7569. ■ 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 10 2013 Focus On International Trade Long Beach Business Journal Page 10 Total Terminal International’s stakeholders are two of the giants of the shipping industry: Hanjin Shipping and Mediterranean Shipping Company. SPOTLIGHT: TOTAL TERMINALS IN An Interview With Sr. VP And Chief Commercial Officer Frank Capo: ‘Lo ■ By MICHAEL GOUGIS Contributing Writer utside the Total Terminals International (TTI) conference room, a massive container cargo ship was unloading its contents – the equivalent of 10,000 20-foot cargo containers, or about twice as much cargo as the largest ships that can make it through the Panama Canal today can carry. And this isn't even the biggest ship that’s come to call at TTI; the terminal has handled ships that are 40 percent larger than this. Massive is an apt word to describe what happens at the TTI facility in Long Beach. The largest ships operating in North America come to call at the modern, efficient terminal, which is equipped with on-dock rail and trucking gates. Frank Capo, senior vice president and chief commercial officer for TTI, de- O scribed the operation, its roots and future with the Port of Long Beach in a recent interview, as the unloading and disbursement operation of the monumental ship unfolded in the background. Total Terminal International’s stakeholders are two of the giants of the shipping industry: Hanjin Shipping and Mediterranean Shipping Company. Hanjin is Korea’s largest shipping company; MSC is the world’s second-largest shipping line. TTI has established a solid footing in the Port of Long Beach, in coordination with operations in Seattle and Oakland, and has plans to accommodate future growth in exports and imports through the secondbusiest container port in the nation. It takes a big facility to stand out in an operation the size of the Port of Long Beach, but TTI’s presence is impossible to ignore. “We have 380 acres and 14 Super-Post- Panamax gantry cranes on 5,000 feet of berth,” Capo says. “We have on-dock rail. Our cranes can handle ships that hold 22 containers across. We’re handling the biggest vessels in North America. “We’re a 24/7 vessel operation, and we operate rail 365 days a year, just like a railroad. We host at least 10 shifts a week at the trucking gates – and if the volume dictates it, we’ll host more.” TTI came into existence in 1992 with operations in Long Beach and Seattle. In April 2001, the company started operations on Berth 55-56 in the Port of Oakland. A year later, the company moved onto the former Long Beach Naval Base on Pier T in the Port of Long Beach. While Hanjin and MSC are the anchor shareholders, TTI lists several third-party clients, including China Ocean Shipping Company, Maersk, Yang Ming Lines, K Line, CMA, USL, NYK, OOCL, Hapag Lloyd, Wan Hai and Evergreen, according to the company’s website. The company lifted approximately one million containers in 2012, and is on schedule to increase that by 20 to 30 percent this year, Capo says. “The majority is containerized, but it’s not all containerized, because we do handle some break bulk shipments and some outof-gauge shipments – large pieces that don't fit inside a container, or that stick out of the top of an open-top container,” Capo says. “The imported products are the finished goods coming in from Asia – the things that we wear and that we buy in our department stores are coming through here. Our exports are wastepaper, scrap, resin and grains.” (Interestingly, wastepaper exports from the U.S. to Asia largely are converted into the packaging needed to 1_INT'LTRADE_2013_Layout 1 4/20/13 2:55 PM Page 11 2013 Focus On International Trade Long Beach Business Journal Page 11 “We’re a 24/7 vessel operation, and we operate rail 365 days a year, just like a railroad. We host at least 10 shifts a week at the trucking gates – and if the volume dictates it, we’ll host more.” Frank Capo, pictured left, Senior Vice President and Chief Commercial Officer, Total Terminals International, LLC TERMINALS INTERNATIONAL, LLC Capo: ‘Long Beach And Southern California Is Where The Volume Is . . .’ ship finished goods made in Asia back to, among other places, the U.S.) Through its Terminal Investment Limited arm, MSC established operations with TTI in Long Beach in March of 2012, Capo says. “I think it was a good partnership between Hanjin and MSC,” Capo says. “Hanjin had a lot of foresight in securing this facility back in 2002 – it is a large, very efficient, state-ofthe-art facility. MSC can now be a beneficiary of this facility. They bring a lot of volume, which is something as a terminal operator you want to have. You want to have as much volume as you can handle.” The size of the container ships calling from Asia has increased in recent months, as shippers transfer their larger lines from the currently less-profitable Asia-to-Europe services to trans-Pacific services. “Hanjin is in the process of upgrading the size of their vessels in their (Pacific Express) service from an average of about 8,000 TEUs to 10,000 TEUs,” Capo says. “Right now, the trans-Pacific trade is benefiting from the fact that the Asia-Europe trade is doing so poorly, and that’s where the largest vessels are traditionally deployed. So you’re seeing vessels from that trade route cascade into the trans-Pacific route because this is more profitable.” With the size of ships increasing, TTI is making plans to ensure that it can accommodate whatever vessels shipping companies choose to send to Long Beach in the future. Currently, TTI and the port are working to raise the height of the 14 SuperPost-Panamax cranes 25 to 30 feet; ship capacity is growing in part by stacking more containers above the deck. And TTI is working to make sure that it is responding to market shifts. Currently, while a fair amount of empty containers are going back to Asia, exports of Midwest grain are increasing. So TTI and partner Hanjin Logistics are planning a new process for expediting grain exports. “The grain facility will be built into our on-dock rail system,” Capo says. “Basically, we’ll empty the grain cars, shoot the grain into cargo containers, and then move the full containers back through our on-dock rail to load them onto ships here at TTI. It’s a whole new concept for grain handling on the West Coast. “More and more grain is moving by container as opposed to bulk vessels. How they handle it on the other side of the ocean is somewhat of a challenge – it gets dumped into a silo and then they have to figure out how to re-load it again. A lot of the carriers and Hanjin logistics have determined that it’s sometimes easier and more efficient to be able to sell grain by the containers.” It’s one visible indication that Total Terminals International is planning for a long stay in the Port of Long Beach. Southern California consumes a large percentage of the goods that come ashore here, and the region’s transportation network is capable of quickly and efficiently transporting the rest across North America. The location, the facility, and the flow of goods make it a highly desirable place to do business, and TTI and its partners want to be part of that in the future. “We’ve got a huge local market here in Southern California. And historically, Southern California has been an intermodal gateway for the West Coast as well,” Capo says. “Long Beach and Southern California is where the volume is. And Long Beach is our flagship operation.” ■ 1_INT'LTRADE_2013_Layout 1 4/20/13 2:56 PM Page 12 2013 Focus On International Trade Long Beach Business Journal Page 12 Approach To Sustainability At Twin Ports ‘Must Consider Environment, Community And Business’ Because the San Pedro Bay has become cleaner – as a result of sustainable practices implemented at both the ports of Los Angeles and Long Beach – sea life has returned the bay as seen by these seals sunbathing on the rocks at Port of Los Angeles’ Pier 400. (Photograph by the Business Journal’s Thomas McConville) ■ By TIFFANY RIDER Senior Writer ustainability efforts at both ports in the San Pedro Bay complex are made following a three-pronged analysis of the environment, the community and business. Only when these three elements have been evaluated in concert can the ports of S Long Beach and Los Angeles grow and be successful, according to the ports’ environmental management leadership. “The only way the port can grow is if we do so in an environmentally responsible manner,” Christopher Cannon, director of environmental management for the Port of Los Angeles (POLA), told the Business Journal. “We also have to be profitable, and we have to be good to our customers.” Robert Kanter, managing director for environmental affairs and planning for the Port of Long Beach (POLB), expressed the same sentiment. “We have a vested interest and are part of the community,” Kanter told the Business Journal. “We don’t want to have any negative impacts on those communities to offset ef- forts. Jobs and economic activity is important but we can’t do that if the cost is trashing the environment. We believe we can have both.” Because of a legal challenge a decade ago about the potential impacts of constructing its 174-acre China Shipping container complex, POLA was “shocked into the modern world” and to the environmental impacts of port activities, according to Cannon. A Officials at the Port of Los Angeles have been studying bird droppings impacting water quality at Cabrillo Beach, a location that is notorious for receiving poor grades from the water quality advocacy organization Heal The Bay. To reduce the amount of droppings on the sand and in the water, the port paid for the installation of these poles connected by wire – technology that has kept the birds at bay. (Photograph by the Business Journal’s Thomas McConville) 1_INT'LTRADE_2013_Layout 1 4/20/13 2:56 PM Page 13 2013 Focus On International Trade Long Beach Business Journal record settlement was reached with the city, noted as “the dawning of a new era of port and community relations” by Natural Resources Defense Council attorney Gail Ruderman Feuer in 2003. “These settlements,” Feuer said, “will start a greening of port expansion plans that will deliver much needed funds to clean up pollution in the neighboring communities while bringing cleaner trucks and shipping operations to the Port of L.A.” Today, Cannon said POLA works to be transparent in its activities and maintain and nurture relationships with its neighbors. “We want to listen to what they have to say and answer questions they have,” he said. In doing so, both ports have established and enacted green policies that address air and water quality concerns. The harbor commissions and staff of both ports are continuing the efforts by developing roadmaps for cleaner, greener ports of the future. “We need to communicate [these plans] more,” Kanter said. “We have port tours. We have a green ports festival to show the public what we are doing, particularly with regard to the environment. I think educated people are the best kind of people because they then recognize everything for what it is; the magnitude of our challenge and can see it first hand.” se seals Page 13 The Port of Long Beach boasts several buildings that the U.S. Green Building Council has certified as Leadership in Energy and Environmental Design (LEED) Gold or higher. The Pier G Maritime Operations building is one such structure; a three-story, 30,000-square-foot design equipped with both traditional green elements and innovative sustainability solutions, according to the Port of Long Beach. (Photograph by the Business Journal’s Thomas McConville) Sustainable Construction Leads To LEED Certified Buildings O ne element of sustainability efforts at both ports is in its construction of infrastructure, from the forthcoming Gerald Desmond Bridge project to new building construction in and around terminals in the ports complex. “We take sustainable port operations to a new level,” Kanter said. “We want to preserve the natural resources we have today for future generations.” The same goes for POLA. Both operations design, construct and operate terminals in a sustainable fashion that aligns with their green policies and procedures. All new buildings of at least 7,500 square (Please Continue To Next Page) 1_INT'LTRADE_2013_Layout 1 4/20/13 2:56 PM Page 14 2013 Focus On International Trade Long Beach Business Journal Page 14 Ports Work With Upstream Sources To Improve Bay Water Quality T Lisa Wunder, assistant air quality supervisor, and Christopher Cannon, director of environmental management, work together on the sustainability programs at the Port of Los Angeles including a rebate project for boat owners at the Cabrillo Beach Marina in San Pedro. (Photograph by the Business Journal’s Thomas McConville) (Continued From Previous Page) International Transportation Service, Inc. (ITS) is expanding its shore-side electricity capabilities at one of its terminal docks in the Port of Long Beach. The technology, known as cold ironing, allows ships to shut off auxiliary engines and use electricity powered by the terminal when at berth. (Photograph by the Business Journal’s Thomas McConville) feet are designed to meet the minimum standards of the U.S. Green Building Council guidelines known as Leadership in Energy and Environmental Design (LEED). Both ports have a minimum goal of meeting the “gold” tier of the LEED program. The highest tier, immediately above gold, is platinum. Efforts recognized to meet LEED standards include recycling of demolition debris, minimizing ocean water pollution, reducing lighting power usage and density, installing efficient fixtures and/or solar panels, using building materials made of recycled content – even controlling the types of fuel used in construction equipment. Buildings at both ports have achieved LEED Gold certification, including the POLA Police Building and the POLB operations building at Pier G. “We just require in the construction part, before we even build, that all construction equipment has to be green,” Cannon said. “Dump trucks and other types of equipment in construction are required to be the cleanest available. We constantly update that and make sure we continue to use the cleanest available management practices.” Green building policies at both ports are rolled into leases with port tenants as well, such as energy use and stormwater management guidelines. At the same time, both ports keep business in perspective. “It can’t be cost prohibitive,” Cannon said. “We err on the side of cleaning the environment, but we do consider business.” he ports of Los Angeles and Long Beach have come a long way in improving water quality to a point where sea life – flora and fauna – are becoming permanent tenants of San Pedro Bay. “I’ve been working at the ports since graduate school, since the 1970s, and it was horrible,” Kanter said. “There were pollutants coming in from upstream via the Dominguez Channel. There were practices in the harbor and terminal allowing pollutants in the water that settled into the sediments. In today’s world, water quality impacts from industrial sources are shut down. It’s pretty clean in terms of industry.” This is evident in the fact that vessels are not allowed to discharge contaminants such as excess fuel into the water. Less manufacturing contributes to less pollution, Kanter said. About 15 years ago, he started a strict housekeeping of terminals and monitoring water discharges in Long Beach’s port. The same has been done in Los Angeles, in addition to a considerable amount of dredging at both ports that has removed contaminated sediment from the bay floor. “Just like Long Beach, we have a lot of legacy contaminants,” Cannon said. “We have to deal with that, both finding sources of contaminants and eliminating existing contaminants. Maintenance dredging has resulted in cleaning up a lot of legacy contaminants.” “As a result, the water here is remarkably clean compared to where it was 10 years ago,” Kanter said. ���I would eat the fish here. We don’t have the types of problems we had before.” Cannon agreed. “We see fish. We see dolphins. We even see sharks,” he said. “We see kelp and other wildlife in the port that has not been there in the past. We are very proud of what we have done.” POLA has also invested in cleaning up Cabrillo Beach, a location that has consistently received negative ratings from the water quality advocacy organization Heal The Bay. “We have been studying excessive bird droppings in the water,” Cannon said. To remedy the issue, the port paid for technology that has kept birds off of the beach. At nearby Cabrillo Beach Marina, POLA is in its second year supporting an exchange program for boat owners to switch out their vessels’ older motors to newer, cleaner engines, according to POLA Air Quality Assistant Supervisor Lisa Wunder. Looking beyond the bay and local beaches, both ports are working with stakeholders to deal with sources of pollution upstream. Waste from cities up the Dominguez Channel collects in water and ends up in the San Pedro Bay – visible trash like plastic but also invisible waste that permeates sediment. “We are at the bottom of the sink,” Kanter said. C are ar e 1_INT'LTRADE_2013_Layout 1 4/20/13 2:56 PM Page 15 2013 Focus On International Trade Long Beach Business Journal Page 15 that is based on how clean a ship is over a distance, similar to a mile-per-gallon rating. Green Ship Incentive And Environmental Ship Index K eeping with the theme of sustainability being good for the environment, good for the community and good for business, two separate but similar incentive programs at the ports of Long Beach and Los Angeles provide shipping companies with rebates for being green. Both ports enacted their programs – the green ship incentive at POLB and the environmental ship index at POLA – in order to attract the newest, cleanest vessels to the San Pedro Bay ports complex. According to Kanter, Long Beach’s approach was to ask the shipping industry what types of things would be motivating factors for bringing clean fleets to port. They wanted funding in a straightforward way, he said, so the port developed a plan that uses the International Maritime Association descriptors for how clean a ship is when it is constructed and allocates rebates based on what tier rating a ship has when it comes to call. The program specifically targets nitrogen oxide (NOX). Tier 2 is the cleanest today, according to Kanter. Ships in 2016 must reach Tier 3 – an 80 percent reduction in NOX. POLB offers a $2,500 rebate for Tier 2; the Tier 3 rebate will be $6,000. The port aims to have half of all of its ship calls Air Resources Board Law Takes Effect January 1, 2014 T Robert Kanter, managing director of environmental affairs and planning for the Port of Long Beach, told the Business Journal that when it comes to incorporating sustainable practices and using clean and green equipment, the ports “have a vested interest and are part of the community.” (Photograph by the Business Journal’s Thomas McConville) be classified Tier 2 and 40 percent be classified Tier 3 by 2023, according to POLB. Los Angeles has a similar program based on the World Ports Climate Initiative program and called the environmental ship index (ESI). The port got involved July 1, 2012, according to Wunder. The index assigns a score to a ship based on its engine’s emissions of NOX, sulfur oxide and greenhouse gases. One way shipping lines can improve a ship’s score is by switching to a lower sulfur fuel. “We have had about 50 to California Cartage and its affiliated companies are transition green ar e one of the first to tr ansition to a gr een fleet. 60 ships every quarter that qualify” for the program, she said. “It’s different than other incentive programs,” Cannon said. “In this case, the ships get a rating number they carry around the world. Once a ship gets that number, that’s the number it goes around the world with. ESI ports get money for that rating.” Ships with positive ratings can also use the data for marketing purposes, Cannon said. Moving forward, Wunder said the program is transitioning to an environmental efficiency index he California Air Resources Board (ARB) mandates container and passenger fleets calling to the six major ports across the state must upgrade at least half of each fleet with the capacity to plug into shore power, or shore-side electric, as well as cut emissions in half by January 1, 2014. The ports of Long Beach and Los Angeles have been ramping up for this new law for years now and are confident that port terminals and ships are ready by the deadline. “ARB followed us,” Cannon said. “We of course, worked very closely with them as we developed our program. What’s nice about it is you have a chance to have a ship come in and shut off its auxiliary engine. The military did it for many years going back to WWII. It’s not a new idea for military ships, but for cargo ships it is.” More than 10,000 ships call to the port complex each year. Because of the ports’ voluntarily developed San Pedro Bay Ports Clean Air Action Plan of 2006, several terminals have already been equipped with shore power ahead of this state regulation. (Please Continue To Next Page) 1_INT'LTRADE_2013_Layout 1 4/20/13 2:56 PM Page 16 2013 Focus On International Trade Long Beach Business Journal (Continued From Previous Page) ITS has retrofitted all of its Transtainers with diesel particulate filters that clean diesel engine exhaust before it escapes into the air. Other equipment ITS has equipped with these clean technology filters include top handlers and utility tractors. (Photograph by the Business Journal’s Thomas McConville) “Big ships pull in and turn off their main engines, then turn on their auxiliary engines,” Kanter said. “When a ship is at berth, the state wants them to turn off the engines completely.” Shutting down those auxiliary engines while at berth is estimated to reduce diesel particulate emissions by approximately 95 percent, according to POLB. On top of that, fleets must reduce their overall emissions by 50 percent; an amount that jumps to 70 percent in 2017 and to 80 percent in 2020. Ships that do not meet these standards will be fined. At POLB, terminals call the technology of ships plugging in to shore power “cold ironing.” Three terminals – British Petroleum, ITT and Matson – all have cold ironing. “The vessels come in, they plug in and Page 16 they turn off all their engines,” Kanter said. At this point, POLB is continuing a major campaign to both educate fleets and install infrastructure to accommodate more cold ironing. The Port of Long Beach is hosting a shore power summit at 10 a.m. on May 6 in the administration building’s boardroom to provide stakeholders with updates on outreach, construction and other developments. Port officials will also go over what fleets and terminals must do to meet the deadline of July 1, 2013, for submitting their shore power plans to ARB. For those who cannot attend, the summit will be available online at www.polb.com/shorepowersummit. “Our engineering group is diligently working to make sure we are all up and running to make those requirements,” POLA’s Wunder said. “We were the first port to have alternative maritime power (AMP) in 2005 with China Shipping. We have four container terminals that have been AMP. This is a natural progression for us to have AMP terminals.” AMP, which is essentially cold ironing, is a trademark of POLA. Twin Ports’ Boards Expect To Approve Zero-Emission Roadmap This Summer A ll of the ports’ efforts to reduce emissions – diesel particulate, greenhouse gases, NOX and other pollutants – have been revolutionary in the international trade industry, according to Cannon. The next step in the evolution of port operations and activities is the development of a zero-emission program, or roadmap. “We are now looking at 70 percent or more on key emissions like diesel particulate matter,” Cannon said. “The problem is we are still a large port. Just by sheer volume, we have continued concerns about reducing emissions further. To hit some of our targets heading into the 2020s, we need to look at other opportunities. We worked last year around this time with the Port of Long Beach and put together a roadmap to identify a plan and a process for the testing, demonstration and deployment of technology, starting with the trucks. That’s our first step. We also want to identify zero-emission technologies for rail and eventually ships.” The boards of harbor commissioners at both ports want the ports to be a zero-emission port complex, according to Kanter. To do so, POLB and POLA are conducting major efforts to test technologies in a portduty cycle that can withstand the harsh environment of the ports and be cost effective. An example is a partnership with the South Coast Air Quality Management District to test some electrified trucks that run on an overhead catenary (trolley) system on a set route. Kanter said the port would like to have a minimum amount of cables running through the complex and have trucks that can operate using battery or hybrid power off of the cable route to make deliveries. “The long-term vision of the port [complex] is to move off of diesel fuel and to electricity and other sources of energy,” Wunder said. “We are starting to work on energy issues now. If we move to electricity, [that will create] a huge demand [on the power grid]. We hope there is a port that is run off of electricity and it comes from cleaner and renewable sources.” Cannon said both ports are collaborating on the roadmap and hope to bring a final draft to their respective harbor commission boards this summer. Rick Cameron, director of environmental planning for POLB, told the Business Journal that the zero-emission roadmap is what will tie together all of the efforts to be a sustainable port over the long term. “We need to be building plans and taking an approach to find more answers to some of our longterm issues,” he said. “We have gotten the low-hanging fruit,” Cannon said. “The things we are doing now are going to be tougher. You can’t forget that this stuff has to work in a business model. We have trucking companies and railroads. They have to make money to survive. They have to be effective in reducing emissions but also must be cost effective. The first rule of sustainability is to sustain yourself.” ■ llutants nternaannon. rt operent of a cent or particublem is eer volbout ree of our need to ked last f Long o idenesting, echnolur first mission ships.” ners at o-emisnter. To ducting a portrsh enfective. e South trict to n on an on a set like to unning ks that power ries. t [comand to nergy,” work on lectricnd [on a port comes .” Caning on al draft mission mental s Jouris what e a susWe need proach r long- fruit,” ng now get that model. ilroads. e. They issions rst rule f.” ■ 1_INT'LTRADE_2013_Layout 1 4/20/13 2:56 PM Page 17 2013 Focus On International Trade Long Beach Business Journal Page 17 Key International Shipping Celebrates 15 Years; Focuses On Central And South America ■ By SAMANTHA MEHLINGER Staff Writer ey International Shipping (KIS), a non-vessel operating common carrier (NVOCC) based in Long Beach, celebrates its 15th anniversary this year. The Federal Maritime Commission identifies an NVOCC as a type of common carrier that does not own the vessels through which it ships cargo. KIS was founded by Brazilian native and former president and CEO, Juliet Kong, in 1998. Current owner, Hernan Venegas, purchased it in December of 2011. KIS specializes in international logistics transactions, managing the flow of resources in international shipments. The company has six fulltime employees. Vice President Mike Boldt oversees the day-to-day functions of the company. He cites the Port of Long Beach and LAX as crucial to KIS’s services. “When it comes to importing and exporting cargo out of Long Beach, it is probably 50 percent of our business,” he says. “Air freight is going to move mainly out of the Los Angeles airport.” He adds that rail is occasionally utilized to move cargo to the east or gulf coasts. KIS originally focused on shipping between the U.S. and Brazil but recently expanded into other trade lanes. “Our main focus right now is in importing and exporting goods into Central and South America. We do have a heavy focus on Brazil, but over the past year and a half we’ve expanded that into Argentina, Chile, Peru and places along those lines,” Boldt explains. Approximately 90 percent of KIS’s business is based in Central and South America, of which Brazil represents 35 to 45 percent. Not surprisingly, this shift occurred around the time Venegas purchased the company. Regarding the firm’s expansion of service areas outside of Brazil, KIS president and CEO Venegas, explains, “We wanted to be more diverse.” Venegas also serves as president of two other companies. He founded a newspaper distribution firm, Venegas Distribution, in 2001 and in 2009, he acquired the medical distribution company Orange Coast Respiratory Care Services. KIS currently has about 80 clients and Boldt estimates 85 percent are businesses. Preferring not to divulge any names, he offers some examples of the types of companies KIS services: a juice concentrate manufacturer, a pesticide manufacturer and “one of my main customers moves textiles to and from Nicaragua.” KIS also specializes in helping individuals move abroad. Boldt says many of these people are natives of Central and South America K Key International Shipping, a global shipping and logistics company, celebrates its 15th Anniversary this year. Pictured are some of Key International Shipping’s staff, from left: Brazilian Export Coordinator Ana Paula Crepaldi; Import and Export Customer Service Lead Patrick Mathisen; Vice President Mike Boldt; Export Coordinator and Documentation Lead Denise White; and Export Coordinator Elsy Sandoval. (Photograph by the Business Journal’s Thomas McConville) who are now choosing to move back. “One of the aspects of our business is we help people who are actually moving back to wherever they came from,” he says, noting that many of these individuals are native Argentinians. “We basically arrange everything and go door-to-door for them,” he says. Boldt believes this practice sets KIS apart. “There aren’t a lot of companies that actually do that. A lot of freight forwarders will stay away from it just because it’s pretty tedious when it comes down to the paperwork and the obstacles you have to go through,” he says. Explaining why KIS has continued working with individuals in this way, Boldt notes, “As we got bigger, we didn’t want to forget where we came from and how we started out.” Like any company, KIS has overcome certain obstacles. “One of the main obstacles is making sure we stay on top of everything that is cutting edge, along with all the rules and regulations the U.S. government has in regards to importing and exporting,” Boldt explains. Boldt reflects upon what factors have made KIS successful over the years. “We really try to educate customers on everything that needs to be done to grow their business, and they can also help grow our business at the same time.” He concludes, “Whether you look at our company or you look at a company down the street that does the same thing, the cargo is going to go on the same boats, the same planes, wherever it happens to be going. We deem ourselves apart in regards to the way we treat our customers and establishing those relationships with them.” ■ SA Recycling Adds Iron Ore Export Services To Its Local Operations ■ By TIFFANY RIDER Senior Writer or the first time in its 51-year history, SA Recycling, the largest scrap metal recycler in the Southwestern United States, shipped iron ore to overseas destinations. The new line of business was added as a means to keep the facility in consistent operation, maintaining local jobs and local revenue, according to SA Recycling President George Adams. He oversees more than 50 recycling facilities located across California, Arizona and Nevada. Its facility on Pier T at the Port of Long Beach began supporting iron ore exports for steel production in March, according to Adams. “I think it’s good business for the port,” Adams told the Business Journal. “It brings more jobs. The more ships that come in, the more caterers bring in food for the ships, people serving fuel for the ship. The railroads switching the cars in and out; all of these things just add up to more jobs.” Volume at SA Recycling’s Long Beach facility had been “off,” Adams said. Recognizing the opportunity available with the facility not operating at full capacity, several options were explored, including wood chips, rubber, gravel, coal, petroleum coke – any kind of bulk commodity. F “You look at all of the different kinds of po- at] Stockton and Richmond were not set tential ship exports that are bulk, but environ- up for iron ore. “Long Beach happens to be very unique mentally none of those things really worked for us,” he said. “Obviously wood chips in the sense that we have all of that [rail(Please Continue To Next Page) would have been fine, but there is no real market for wood chips here. We’re just in the wrong place. The logical thing for us was iron ore. That was the one thing that was definitely available.” According to the U.S. Geological Survey (USGS), there was a sharp decline in the production of usable iron ore between 2008 and 2009. Numbers recovered slightly in 2010 through 2011, leveling off in 2012. USGS estimated the value of domestic production of iron ore at $6 billion for 2012. “A couple of years ago, when the price of iron ore started going up, [closed] mines became viable,” Adams said. “They have been working on getting different mines reopened, but there wasn’t really a good port” from which to export the material. Adams said Northern California had seen SA Recycling, Inc. has added a new line of business to its facility in Long Beach – iron ore. (Photograph by the Business Journal’s some activity, but that [ports Thomas McConville) 1_INT'LTRADE_2013_Layout 1 4/20/13 2:56 PM Page 18 2013 Focus On International Trade Long Beach Business Journal Page 18 (Continued From Previous Page) road] trackage right outside of our facility,” he said. “There are two tracks by us, plus we have two tracks inside of our facility. So we can bring in 50 cars at a time. It worked out well for rail, and we have the equipment.” The facility is using its scrap loading equipment with the goal of achieving load rates of 80,000 to 90,000 tons per month. “We are bringing it in by rail or by truck. We are doing some processing and some blending. And then we are loading the material out.” SA Recycling is able to leverage equipment typically used for other operations – such as shredding, shearing, sorting, baling and torching – to process and blend the iron ore, Adams said. All of SA Recycling’s iron ore shipments are going to Asia, Adams said. China is the largest user of iron ore, having imported more than 60 percent of the world’s total iron ore trade in 2012, according to USGS. While the United States is also a large consumer of iron The SA Recycling center at the Port of Long Beach processes scrap metal that is shipped to Asia, and adding iron ore to its exports portfolio helps satiate client demand for the commodity used to produce steel. The company shipped its first delivery of iron ore on March 31, Easter Sunday. (Photograph by the Business Journal’s Thomas McConville) ore, Adams said mining on the East Coast satiates our nation’s production needs. “From where we are, it needs to go overseas,” he said. Scrap ferrous and nonferrous metal exports remains SA Recycling’s main business, though iron ore has already proven language and the spoken side,” Scarpaci says. The out-of-state client list continues to grow. “On video remote conferencing, we have done work in Washington D.C. and Maryland. We have a client on the east coast that has a virtual school on the Internet,” Scarpaci elaborates. He also lists Arizona, Iowa and Ohio as clients. Another client gained through video conferencing is the University of Chicago. “Why would LiNKS Sign Language and Interpreting Services has expanded its scope to include 25 spoken languages in addition to sign language. LiNKS’ Director Chuck Scarpaci signs with Debora Santoni, client services scheduler, inside the organization’s of- they want to find us? fices at Goodwill SOLAC on 800 W. Pacific Coast Hwy. (Photograph by the Business Journal’s Thomas McConville) Well, they tried other vendors, and we hapto make a change, so we started doing med- has been a part of LiNKS business since its pened to have some good interpreters. ical interpreting—the hospital business.” inception, Scarpaci asserts. After LiNKS They like our software program,” Spoken language services were imple- was founded, he says, it “picked up a couScarpaci says of the university. mented about two years ago, according to ple big contracts with the county of L.A. Scarpaci has been with LiNKS since Scarpaci. “We started out at maybe five lan- and started growing business.” He adds that 2004. “I was hired as a business person and LiNKS frequently works with the IRS. guages,” he says. developer,” he recalls. “Before I came here The City of Long Beach also utilizes my background was very diverse. I was an LiNKS works with about 250 interpreters, some of whom are trilingual. LiNKS’ interpreters. “We work with the executive director at the time for a food bank Scarpaci notes that in a school setting, for police department, which is 24/7. They call that is in skid row.” When he applied, he was example, a trilingual interpreter might “go us for the crime element,” Scarpaci asserts. not sure he would get the job. “Historically, LiNKS is hoping to expand its service to they’ve always had interpreters run this, out and speak Spanish to the parents, sign language to the student who is deaf, and the international and maritime community, which is fine, but they wanted someone with especially since its wide range of language a business background.” speak English with the teacher.” Scarpaci states that LiNKS’ services pri- translation is ideal for the global commuIn terms of LiNKS’ goals within Goodmarily extend to medical, school, and busi- nity. “Absolutely” we are willing to work will, Scarpaci says, “Internally, we have ness settings. One of LiNKS’ first with the port or within international trade responsibility to bring back net gains.” spoken-language interpreting clients was a in general, Scarpaci says. “We’ll go any- These net gains are dispersed among Google application reseller, SADA Systems, where in California.” Goodwill’s programs. LiNKS also offers Video Remote Interpretin Burbank. Over a period of six weeks, he He also reflects upon LiNKS’ goals in says, “Our Mandarin interpreter spoke Eng- ing (VRI) compliant with the Americans with terms of service to the community. “Our relish in Burbank and Mandarin to SADA’s Disabilities Act. The video service has ex- sponsibility to the external market is to make panded LiNKS’ business outside of Califor- sure the deaf consumer gets the best internew client in Malaysia.” Government is another sector LiNKS nia. “It’s becoming a very fast growing preting available. For the language barrier, serves. Interaction with government entities market for the whole industry, both in sign it’s the best translator for that specific job.” ■ LiNKS Diversifies Its Interpretation Services ■ By SAMANTHA MEHLINGER Staff Writer iNKS Sign Language & Interpreting Services has diversified its services to include a repertoire of 25 languages. LiNKS, a division of Goodwill Southern Los Angeles County (SOLAC), was founded in 1999 to meet local needs for sign language interpretation. Director Chuck Scarpaci says that the nonprofit organization was solely focused on this endeavor until about two years ago. Demand drove the diversification of services, Scarpaci indicates. “Today we have in Southern California about 125 different languages on any given day at a hospital, a meeting or a school district,” he says. A language report from the 2007 American Community Survey estimates 42.6 percent of Californians speak a language other than English at home. This percentage is larger than any other state. Scarpaci says LiNKS first considered spoken-language interpretation when it received requests from organizations such as Cedars-Sinai and St. Francis Hospital. “After speaking with those hospitals, I had a consultant come in and we developed a game plan to very slowly roll out languages,” he recalls. Economic forces were also a factor in introducing spoken-language services. “When the stock market fell in 2008 and 2009, it took us a year to catch up with the bad economy. Our business started going south a little bit. The schools were cutting back on the dollars they had for services,” Scarpaci says. To make up for lost business, Scarpaci looked to expand the markets LiNKS serviced. He says, “By 2009, I decided we had L to be a worthwhile supplement to its scrap metal exports. “The great thing about iron ore is that our customers who are buying scrap metal are also buying iron ore. This allows us to better serve our customers. We loaded a cargo of iron ore on Easter and the following week we loaded a cargo of plate and structural scrap. The next week we loaded a cargo of iron ore. If I can keep alternating these things, then it will be great for us.” Founded in 1962, SA Recycling, which also has a facility in the Port of Los Angeles, has been recognized as a leader in protecting the environment, including operating under Best Available Control Technology. It was the first metal recycler in the U.S. to install a Regenerative Thermal Oxidizer, removing volatile organic compounds from the processing of shredded metal. In 2012, SA Recycling received the San Pedro Bay Clean Air Action award for its environmental efforts. ■ 1_INT'LTRADE_2013_Layout 1 4/20/13 2:56 PM Page 19 2013 Focus On International Trade Long Beach Business Journal Page 19 Shipping Industry Executive To Speak At Long Beach Chamber Luncheon Richard du Moulin Is President Of Intrepid Shipping ■ By SAMANTHA MEHLINGER Staff Writer he successes and failures of the global shipping industry will be examined by long time shipping executive Richard T. du Moulin at the May 30 World Trade Week luncheon presented by the Long Beach Area Chamber of Commerce. Du Moulin is president of Intrepid Shipping LLC. He served as chief operating officer of OMI Corporation, an international shipping company, from 1974 to 1989, and as chairman and CEO of Marine Transport Corporation from 1989 to 2001. One issue du Moulin is concerned about is ship safety. “We continue to have major accidents,” he asserts. “Even when you have technology, you still have a problem with operating ships safely.” For this reason, he stresses the importance of not only good ship design, but also the training and treatment of crewmembers. An excess of vessels is another key issue for du Moulin. “This doesn’t matter too much to somebody who charters ships, but it matters a lot to the people who build, own, operate and finance ships,” he says. He attributes this overabundance to “the euphoria that came from the big boom [in shipbuilding] that started in 2002 and ended in 2008.” As a result, there is a large supply of ships with not enough demand, he claims. As an option, he suggests scrapping old ships. Another possible answer “is that people slow their ships down. This is the only thing that has immediate impact.” He explains that slowing a vessel means it can carry less cargo, which necessitates using more ships. Fewer ships sit idle as a result. Du Moulin sees promise in technological advances. “There has been very good technology applied to propulsion engines in terms of burning cleaner fuels and being more fuel efficient. One of the leaders pushing this is California,” du Moulin says, adding that Long Beach is a great place to have this discussion, considering the port’sefforts to reduce fuel emissions. Intrepid Shipping LLC, which is based in Stamford, Connecticut, is a global shipping company with a fleet comprised of three bulk carriers and three chemical tankers. According to du Moulin each vessel is less than two years old. Du Moulin originally founded Intrepid Shipping in 1989 after leaving OMI Corp. T poken client w. “On erencwork in and a client t has a e Interorates. a, Iowa gained onferversity would d us? other hapreters. gram,” since on and e here was an d bank he was rically, n this, ne with Goode have ains.” among oals in Our reo make interbarrier, job.” ■ Shortly thereafter, Intrepid acquired Marine Transport and assumed its name. The company was sold to Crowley Maritime in 2000 due to the financial instability involved in repairing an aging fleet. “We decided it was a wiser move to sell to a stronger company,” du Moulin says. In 2002, Du Moulin reestablished Intrepid Shipping with his business partner, Mark Filanowski, with whom he had worked at Marine Transport. “We sold Marine Transport and reestablished Intrepid again. So Intrepid kind of had two lives,” du Moulin notes. Currently, he cites China as one of Intrepid’s biggest markets. “China is just a sponge for raw materials,” as are “the Indian subcontinent, Southeast Asia, Korea, and Japan.” He estimates Intrepid’s vessels have called port in at least 50 countries. Du Moulin has served on the boards of various shipping and maritime companies and organizations. He is chairman of The Seamen’s Church Institute of New York and New Jersey. He also served as chair of INTERTANKO and director of the American Bureau of Shipping. Richard T. du Moulin, president of Intrepid Shipping LLC, based in Connecticut, is the guest speaker at the annual World Trade Week luncheon presented March 30 by the Long Beach Area Chamber of Commerce. Du Moulin has competed in the America’s Cup, Transpac and Transatlantic races. Du Moulin has raced yachts most of his life, including the America’s Cup, Transpac and Transatlantic races. He holds the record for fastest sailing voyage from New York to Hong Kong. The luncheon will be held at the Westin Long Beach, 333 E. Ocean Blvd. For tickets or more information, visit www.lbchamber.com, or call Judy Nelson at or 562/4328128. ■ 1_INT'LTRADE_2013_Layout 1 4/20/13 2:56 PM Page 20 2013 Focus On International Trade World Trade Week Events Calendar May 2013 Calendar Information Provided by the Los Angeles Area Chamber Of Commerce www.lachamber.com May 1 ACCESS 2013: International Trade Forum 7:30 a.m.-5 p.m. San Diego Marriott La Jolla 4240 La Jolla Village Dr. email@example.com International Business Culture – Free Export Workshop 9 a.m.-Noon ITT Technical Institute Sylmar 12669 Encinitas Ave, Sylmar firstname.lastname@example.org Aerospace & Defense Industry Suppliers Conference 9 a.m.-5 p.m. Jonathan Club 545 South Figueroa St., Los Angeles email@example.com WIT-LA Webinar – Create A Culturally Smart Export Plan 11 a.m.-Noon http://www.wit-la.org/event.asp firstname.lastname@example.org May 2 87th Annual World Trade Week Kickoff Breakfast 7:15-10:30 a.m. JW Marriott at L.A. LIVE 900 W. Olympic Blvd., Los Angeles www.worldtradeweek.com May 4 21st Annual Day at the Races 10:30 a.m.-4 p.m.; Hollywood Park, 1050 S. Prairie Ave., Inglewood email@example.com May 7 The 28th World Ports Conference 8 a.m.-5 p.m. JW Marriott at L.A. LIVE 900 W. Olympic Blvd., Los Angeles firstname.lastname@example.org May 8 Export Trade Finance & Export Trade Insurance Seminar 8 a.m.-4 p.m. L.A. Area Chamber of Commerce 350 S. Bixel St., Los Angeles email@example.com May 9 WIT-LA: Trade Officials From ASEAN Economies: Opportunities For U.S. Businesses 11 a.m.-2 p.m. L.A. Area Chamber of Commerce 350 S. Bixel St., Los Angeles firstname.lastname@example.org May 14 Port Study Tour 2013: Port of San Diego & Port of Los Angeles 9 a.m.- 10 p.m. World Trade Center San Diego 2980 Pacific Hwy., San Diego email@example.com May 15 7th Anual US-Japan Green Conference 8 a.m.- 5 p.m. Miyako Hybrid Hotel 21381 S. Western Ave., Torrance www.jas-socal.org International Trade Outlook 7:30-10:30 p.m. Renaissance Long Beach 111 E. Ocean Blvd., Long Beach firstname.lastname@example.org Is Exporting For Me? – Free Export Workshop 9 a.m.-Noon ITT Technical Institute Sylmar 12669 Encinitas Ave., Sylmar email@example.com WIT-LA Webinar: Pitfalls In Contract Language 11 a.m.-Noon. http://www.wit-la.org/event.asp firstname.lastname@example.org May 23 FTA World Trade Week & International Trade Delegates Luncheon And Trade Fair 8:30 a.m.-1 p.m. Hilton Long Beach 701 W. Ocean Blvd, Long Beach email@example.com May 24 The BRICS Countries – A Global Growth Powerhouse 8:30 a.m.- 4 p.m. Irvine Auditorium, Monterey Institute of International Study 499 Pierce St., Monterey, CA firstname.lastname@example.org May 28 Global Action Forum & Awards 8 a.m.-5 p.m. L.A. Convention Center 1201 S. Figueroa St., Los Angeles email@example.com May 29 State of the Global Economy 9 a.m.-2 p.m. California Lutheran University 60 W Olsen Rd., Thousand Oaks firstname.lastname@example.org Celebrate World Trade Month: “Focus on Brazil, The Latin American Giant VITA Global Networking Breakfast 7:30-10 a.m. The Valley Economic Alliance 5121 Van Nuys Blvd., BFG Boardroom 2nd Floor; Sherman Oaks email@example.com Finding & Entering New Export Markets/International Matchmaking – Free Export Workshop 9 a.m.-Noon ITT Technical Institute Sylmar 12669 Encinitas Ave., Sylmar firstname.lastname@example.org May 30 UPS International Symposium: Advance Your International Expansion 12:30-4 p.m., Grammy Museum 800 W. Olympic Blvd. Ste 245 Los Angeles UPSCentralCalEvents@ups.com World Trade Week History The World Trade Week concept was conceived in 1926 and first observed in 1927 in Southern California. World trade significantly contributes to the nation’s economy and has developed a vast new horizon for America’s businesses. In 1926, Stanley T. Olafson, then manager of the World Trade Department of the Los Angeles Chamber of Commerce, conceived the idea of a World Trade Week observance in Southern California. This was during a period of isolationism and under the conditions prevailing during the heyday of the restrictive Smoot-Hawley Tariff Act. In 1935, President Franklin Delano Roosevelt officially proclaimed World Trade Week a national observance by the U.S. Government and selected the third week in May each year, which includes May 22, National Maritime Day. Initially, the purpose of World Trade Week was the promotion of the Ports of Los Angeles and Long Beach. Following World War II, the expanding economy and potential for international commerce growth created an opportunity for World Trade Week to expand its scope to include all facilities and organizations in the Southern California area involved in world trade. Under the guidance of its founding sponsors the Los Angeles Area Chamber of Commerce, Los Angeles World Airports, the Port of Long Beach and the Port of Los Angeles, the original week-long observance has now grown to more than 30 events held each year from May 1-30 in the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura. This tremendous nonprofit endeavor is further supported by Southern California companies that offer sponsorship for the many programs and informational materials the World Trade Week Southern California Committee creates each year. – Los Angeles Area Chamber of Commerce www.worldtradeweek.com Thank You Advertisers The following companies and public sector entities made the 2013 Focus On International Trade possible: • American Marine Corporation • California Cartage Company • California State University, Long Beach • Crowley • Eastern Car Liner (Americas) • Export-Import Bank of the United States • FuturePorts • LiNKS • Long Beach Container Terminal • Moffatt & Nichol • Pacific Crane Maintenance Company • Pacific Harbor Line • Pasha Stevedoring & Terminals • Port of Long Beach • Port of Los Angeles • SSA Marine • TOPtainer • Total Terminals International • Total Transportation Services, Inc. – Long Beach Business Journal Photograph by the Business Journal’s Thomas McConville IntTrade_Covers_042313.indd 3 4/19/13 2:13 PM PortBC_April23_2013_LBBJ MASTER LAYOUT 4/19/13 3:24 PM Page 1