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52 Journal of Commerce | J anuar y 2, 2023 www.joc.com EXECUTIVE COMMENTARY ANNUAL REVIEW & OUTLOOK 2023 Maritime Port Everglades Jonathan T. Daniels CEO and Director porteverglades.net Change is inevitable. But what matters most is how we have responded. When the COVID-19 pandemic disrupted the flow of goods, the supply chain industry had two options: to evolve or to maintain its present, unsustainable course. lanes provides deepwater access with unrestricted air draft for all types of vessels and is known for its efficiency in handling non- containerized cargo. Refrigerated and frozen prod - ucts shipped as bulk or breakbulk cargo are not desirable for offload nor efficiently handled at container ports. Port Canaveral provides cargo owners with the opportunity for better and faster turnaround of products from ship to store shelves to save time and money and lessen the chance for spoilage — overall, highly attractive advantages that a growing number of wholesalers and retailers are recognizing. refrigerated bulkers for transporting palletized breakbulk cargoes, such as frozen food or other perishable products — commodities that have been traditionally shipped as con - tainerized cargo. This move toward diversifying shipping options has provided retailers with alternatives to what has typically been tradi- tional single-shipping commitments in the container trade. With some cargo owners revert- ing to what may be considered "old school" shipping methods, Port Canaveral has benefited from the increased volumes of inbound pal- letized goods. The port's strategic location along the Atlantic shipping Pacific Maritime Association James C. McKenna President and CEO pmanet.org Maritime trade and the broader supply chain have confronted extraordinary chal- lenges in recent years. A sustained wave of record-high container traffic during the COVID-19 pandemic has given way to dramatic declines in cargo volume, which reached pre-pandemic lows in the second half of 2022. The experience of the past three years has revealed three core issues that need to be addressed going forward: 1. the capacity constraints of current marine terminals that have no ability to expand physically; 2. the acceleration and ongoing diversion of cargo to East Coast and Gulf Coast ports; and 3. the lack of synchronicity between all facets of the supply chain. As we enter 2023, capacity constraints and determined competition have added urgency to one reality that hasn't changed: the need to expand through - put to ensure the vitality of West Coast ports. In large part, that means enhancing efficiency and productivity through automation, particularly at the Ports of Los Angeles and Long Beach. A PMA-commissioned study led by respected academic and former Assistant Defense Secretary Dr. Michael Nacht documented how auto- mation at the San Pedro Bay ports has delivered tangible gains for both business and labor. Growth in throughput, paid hours, and jobs in recent years shows the substantial investment in new technologies has paid off. This moderniza- tion push needs to extend to all elements of our interrelated supply chain. It is not enough to streamline handoffs from ships to drayage trucks and trains to reduce port congestion. There must be efficient handoffs at inland freight hubs, warehouses, and last-mile distribution centers — a process that entails better technology and systems coordination among the various links in the chain. Synchronizing the supply chain through modernization is vital not just for economic efficiency, but also environmental stewardship. West Coast ports operate under the most stringent regulations in the country. The ports have cut emissions by introducing electrified, automated tech - nology at terminals, shortening dwell times for ships, and moving vehicles in and out of the port faster. Likewise, new logistics technologies and coor- dination will reduce carbon emissions across the entire supply chain. As the new year begins, the shipping industry's prospects hinge on many variables: how inflation impacts consumer demand, especially for durables associated with home purchases; whether major retailers hedge by slowing orders; whether shipping lines pull back capacity after a spike in ship-building; and how all of these affect shipping rates, which have fluctu - ated wildly since the pandemic. A key additional factor complicates the prospects for West Coast ports: the need for dependable labor peace. At the time of writing, PMA–ILWU negotiations for a coastwide contract are continuing, having begun in May 2022 with the prior contract expiring last July. It is vitally important to PMA and to the prosperity of West Coast ports overall that an agreement be reached as soon as possible and without work disruptions. It is also public knowledge that the protracted talks are adversely impacting traffic, as shippers increasingly bypass the West Coast in favor of Gulf Coast and East Coast alternatives. One unfortunate consequence is reduced work opportunities for International Longshore and Warehouse Union (ILWU) members. Contract uncertainty for rail workers nationally in recent months has created additional unpredictability for the supply chain, underscoring the challenge of ensuring that all links work in harmony. US economic vitality depends on quickly reaching a contract with the ILWU without disruptions; moving forward with continued port modern - ization, including automation; and collaborating with industry partners to help modernize and synchronize the supply chain. A modern, environmentally friendly supply chain will do more than just enhance transport reliability. It will bring broad economic and social value for communities near the ports and also far from the docks. At the heart of this solution are strong, competitive, and efficient West Coast ports. "A modern, environmentally friendly supply chain will do more than just enhance transport reliability. It will bring broad economic and social value for communities near the ports and also far from the docks. " ◀ "When the COVID-19 pandemic disrupted the flow of goods, the supply chain industry had two options: to evolve or to maintain its present, unsustainable course." Jonathan T. Daniels