Q&A: Port of Oakland Executive Director Danny Wan

Logistics Management (LM智慧)集团最近新闻编辑杰夫·伯曼说h Port of Oakland Executive Director Danny Wan. Wan has been in his current role since November 2019. He initially advised the Port in the 1990s as an external legal counsel to the Aviation Division. From 2005 to 2008, he served as Deputy Port Attorney. In 2012, Mr. Wan became Port Attorney and advised the Port Board and staff on a broad range of issues in the conduct of the Port’s Maritime, Aviation, and Commercial Real Estate businesses. Prior to his formal appointment as Executive Director, he served as both acting and interim Executive Director.

Wan provided Berman with a wide overview of various efforts the Port of Oakland is focused on. Their conversation follows below.

LM:The Port of Oakland recently reached an environmental milestone by reducing diesel emissions 86% from 2005 levels. What steps were taken to reach that goal?

Wan:That was the goal we set in the development of the plan in 2007 in the Port’sMaritime Air Improvement Quality Plan. We were glad we met that, mostly through a lot of truck diesel emissions and also ship plug-ins (code ironing is the old term for that).

We accomplished a lot of that, and we migrated our goal from that plan to ourSeaport 2020 and Beyond Plan, which is really focused on a zero emissions future for the port. It is based on a few different pillars.

LM:What are the pillars?

Wan:The first one is that the Port of Oakland is somewhat unique, in that a large part of our area is our own utility in which we supply the electricity…of course we have to purchase it from elsewhere and a large part of that is still shipped through PGE’s (Pacific Gas and Electric) powerlines. So, because we have the freedom to select the source of our power to really establish a microgrid, meaning that we want to produce both the source on the site, solar energy for example, and also have battery storage type of things so that we have a clean source of power, as well as some resilience. Because when you depend on PGE’s pipelines you are subject to their disruptions, which we have seen in Northern California with our reliability.

Number two is our advantage we have with our own power utility, for both our airport and our seaport. We are experimenting right now with dray trucks, both on long dray and short dray and right now we are doing demonstrations of electric trucks…it has been more successful for short drays and intra-port drays. But for longer drays, we are going to have to look at some more technology, including hydrogen which is one of the things we are exploring.

Lastly is really investment into our grids to make sure we are getting the funds that the Federal Government is emphasizing now for zero emissions and GHG (greenhouse gases) and that is really something we are going to have to drive towards. That goes to the Fed and port’s goal of zero emissions, as well as also coming from an environmental justice perspective…we are next to West Oakland, which is a disadvantaged neighborhood.

LM:2021 was a record volume year for imports for the Port of Oakland. How did the port handle the increase in volumes, given challenges in port throughput?

Wan:The story at Oakland is a little different than it is at Los Angeles and Long Beach.

Obviously, we are all subject to the influx of imports based on consumer demand behavior changes and such. At the beginning of the pandemic, we had about 30 ships lined up and that was mostly due to the labor shortage in the form of a longshoremen shortage, and we corrected that problem. And then what we found out was that a lot of these shipping lines decided that since we are the second port of call, with calls going from Asia to San Pedro first and then they come here and back to Asia. A lot of the carrier lines decided that they don’t want to make a second stop because they are in a big hurry to get empties back to Asia to pick up more imports so they started skipping Oakland.

At one point, it was so bad that our TraPac terminal had no ships visiting for an entire week so we actually lost both import and export volume during those months. Recently, there has been a pickup on the import side but our exports continue to lag

One of the unique things about the Port of Oakland is our 50% import/50% export [ratio] in normal times, and the reason export activity is so prolific through the port is that it is we are close to Central Valley agriculture products and most of the protein exports are through the port, as well as being the second port of call. That makes it easier for exporters to come here and ship directly to Asia without having to make any more stops

What is going on now, the big issue we are dealing with is even though our imports have been hitting higher numbers, our exports are so much lower that our total volume has actually dropped. And the bigger problem is that our export customers are basically being squeezed out by imports and the congestion and space is being taken up by imports and the empties are not necessarily going here to pick up exports—they are going back to Asia to pick up exports.

That is a big issue and that is why the recentUSDA announcementwill help exporters.

LM:What problems, or issues, does this partnership with the UDSA address?

Wan:Exporters are not having ships come to Oakland to pick up their stuff, and that is the biggest problem. The second problem is even though ships are stopping to pick up, the space in the terminals is being taken up by imports and they cannot even get access to the empties, due to both the congestion and the inability to get into the terminals and to also get it on time

For example, in January one of the shipping lines gave our exporters a four-hour window to drop stuff off and put it on a ship which is practically impossible. The access/quick turnaround issue at the port is one of the things driving the exporters’ inability to export

因此,我们要建立一个弹出式庭院与武器装备pment both to move the boxes quickly and also to stack them and stack empties at the yard and also provide reefer plugs for those refrigerated containers to be prepped before they are used. This will help to take the empties out of the terminal and decongest the terminals themselves and to provide an easy and convenient place for exports and empties both refrigerated and non-refrigerated

There is a cost to that because we are hiring operators and buying equipment to provide for that so the USDA in an effort to help with our exporters gets a little bit of help with their problems. For anyone to access the yard, it is $150 per container and the USDA reimburses the ag exporters using this pop-up yard as well as to fund about 60% of the equipment for the yard, figuring about 60 pct of the yard will be used for ag exporters.

LM:In the recent State of the Port Address, you said a major focus for the Port of Oakland is to be a seaport that supports its regional economy by providing cargo drop-offs and receiving that are on time, uncongested and transparent. What is your approach with this?

Wan:2015年,美国空出一个150英亩的终端端口at the port, because it was not doing enough business and another reason was that for that terminal to be fully functional and fully utilized it needs 100s of millions of dollars in investment for cranes, pavement, waterside improvements…and Ports America was supposed to make that investment, but it never did and went bankrupt.

We have the extra capacity but just did not get the investment in time to actually put that extra capacity into full use. And this is one of the problems with California ports, in that we have not had the same kind of level of public investment that some other states’ ports have received from their state partners. If we had the money to invest after Ports America left, we could have been using that space today to help address this congestion problem. Instead, it is being used as a container storage yard for single-stacked containers, which is very inefficient.

We are going to have to fully utilize our capacity and make the investment to make it more efficient and denser and to fully utilize and put that extra capacity into play here, which is number one.

Number two is transportation access, and egress is going to have to be figured out because, again, one of the issues is the lack of investments and also coordination with the city of Oakland and Caltrans needs to be worked out so we have clearly delineated truck routes to get into and out of the port in a much faster way.

Rail is going to have to be put into play. One of the things we are exploring is an inland port- type of concept where instead of shippers coming to port they go to an inland port where A railroad picks up and drops off. The problem there is we are going to have to convince the railroads to do short-haul, which they are not so willing to do here because, again, California has not really made any investments into short-haul rail lines. We don’t have short-line railroad partners, and that is one of the issues compared to the East coast and Southeast coast, where some of the states and ports actually own their short-haul railroad facilities and we don’t so we have to depend on the Class 1s and they are not willing to do the short haul so far and we are trying to convince them to help us do that.

I think the key here is investment, planning, and putting our extra capacity to use and, of course, all the while reducing emissions in our urban environment so we can coexist with our local and surrounding communities here.

LM:How would you assess the impact of the pandemic on things like the 2021 Peak Season, in terms of how it went, given the many supply chain challenges?

Wan:Like everyone else, these pandemic-induced abnormalities in our supply chain are revealing a lot of holes in the resilience of our systems here and a lack of investment has also made it difficult with the land we have but cannot use.

Another deficiency this revealed is the lack of transparency in the ports system not just here at Oakland.

Different segments of the supply chain don’t talk to each other. Shippers cannot find out whether vessels are coming or going or if a container is or is not available or pick up and ship out times

We also run an airport, so imagine if you are flying to Oakland from back East and an airline cannot tell you when your plane is arriving or leaving. That needs to be worked out, especially in California.

And we are now looking into our deficiencies i.e., transparency and lack of investment.

California has to look at itself and say is this is system where we have three-to-four ports competing against each other and there is no coordination on a statewide basis and is that the best use of our facilities?

A statewide freight policy is going to have to be put into place I think after this. It has been difficult dealing with long-term structural issues in a very short time, realizing it is hampering our ability to meet demands right now. It has been both difficult and revealing.

LM:In the State of the Port Address, you said there are three new vessel services making the Port of Oakland their first U.S stop. What are the details?

Wan:The three services are CMA CGM, Matson, and Wan Hai Lines. Wan Hai is kind of a new partnership. The other two are existing partnerships but with new services that have not been offered before here at the port.

It is significant in that it is the first port of call so that means more imports, frankly. Our goal here is to convince some of these shipping lines that they need to come and make more export capacity available at the Port of Oakland, because that is essentially 50% of our business and they are killing it because they are not picking up stuff.

And, secondly, picking up more exports may mean sending more smaller ships here in order to simply make a direct back and forth without any other stops which is what we are shooting for.

LM:Where is the port as it relates to the different types of funding, from things like the Bipartisan Infrastructure Bill, the federal Port Infrastructure Development Program and a portion of a $2.3 billion state of California fund?

Wan:I would say most of that is in the early innings and some of it is in progress like the $280 million we got from the state legislators for planning so they can decongest the railroad in Embarcadero and the commercial real estate corridor. That is part of the widening of the main egress for trucks into the port and it has been in the planning stages for about six years

That will be put into place pretty fast. There is also $15 million for the airport, which is much more regulated through its relationship with the FAA, in terms of funding and planning

This $15 million is on top of what we get, which is really nice, and the airport is planning its own expansion and renewal.

LM:How do you view the Ocean Shipping and Reform Act, which is currently moving through Congress?

Wan:The Senate version is focused on making sure we have a system for agriculture exports. That is something we are focused on, and I hope that is an aspect of the bill that can be helpful

I am encouraged that both Congress and State of California are both looking at this issue within our supply chain to see what kind of solutions may be put in place and also the FMC’s (Federal Maritime Commission) role in all of that.

我认为,细节,我们的中性l on because there are aspects of the bill we like and others we hope are improved upon. I am also president of California Association of Port Authorities (CAPA) right now, and AAPA (American Association of Port Authorities) and CAPA are taking a neutral stance on the bill.

LM:What is your take on the talks between the ILWU and PMA leading up to the expiration of their current labor deal?

Wan:California ports are all landlord ports so we don’t actually hire the ILWU. They don’t work for us; they work for the terminal operators. The PMA is the contracting party or the employer group that hires ILWU.

We are a very interested third party, our future depends on them, and we continue to work the terminals. So, obviously, the message from us has always been that the West Coast cannot take yet another hit like it did in the last contract, as the last contract certainly resulted in lost share.

I don’t think it is in anybody’s interest, from a West Coast or national perspective to add that into the supply chain situation right now.

That point is being emphasized over and over again to the negotiating parties—and the noise coming from the two parties—is that they understand that and certainly will try at all costs to avoid another disruption so we will see. We are hopeful that is the case.