Conference discusses the state of SC logistics

here’s much regret over the port strike, which some say paralyzed the industry for one year. There’s also call for more spending on logistics statewide, and a recurring theme is how moving goods from the port to the warehouse is becoming more high-tech.

(Editor’s Note: This is an expanded version of a story that appeared in the April 25th edition of iebusinessdaily.com)

The Southern California logistics industry could be several years recovering from recent labor strife at the ports of Los Angeles and Long Beach, according to a group of industry members.

The dispute, which has yet to be officially resolved, has caused so much havoc at both facilities that everyone had to focus exclusively on the resolving that dispute, said Reade Kidd, Home Depot’s director of international logistics.

“We spent one year not innovating, one year not thinking about how to solve our future problems,” said Kidd, part of a panel discussion today at the Southern California 2015 Logistics & Supply Chain Summit in Pomona. “By ‘we,’ I mean the entire industry. We all took a year off. It’s been a tough few months, and a tough last year.”

Much of the Inland Empire economy depends on the billions of dollars worth of goods that pass through the ports every year. About 120,000 people work in the Inland logistics industry, which accounts for about $300 billion of the region’s annual economy, regional economist John Husing said.

The one-day conference, which attracted about 320 people, featured officials from all parts of the logistics industry. Most of the panelists deplored much of the current operations at the port facilities and were critical of their own operations for not responding to the crisis more effectively.

One speaker claimed that Domino’s can move pizza faster and more efficiently than some port companies are able to move goods off the docks. No other panel members took exception to that comparison.

“I can pick up the phone right now, call Disneyland and find out how long it takes to get on Pirates of the Caribbean, “ said Alex Cherin, an attorney with the California Trucking Association. “Why can’t I do the same thing with the ports? I think the ports of Los Angeles and Long Beach can be as efficient as Disneyland.”

All of the panelists deplored the recent strike, which involved charges of poor working conditions at the ports.

“It was a perfect storm that caused all of this,” said Michelle Grubbs vice president with Pacific Merchant Shipping Association, which represents west coast dockworkers and terminal operators. “Labor issues, regulation issues, changes in the way [goods] are handled. I don’t think anyone could have predicted what happened, but it did.”

Grubbs admitted that her organization has to rebuild some of its relationships within the logistics industry, but vowed that it will do so.

“I look forward to coming back here next year and telling everyone how much things have improved,” she said.

Some retailers who couldn’t get their goods to port were fined even though they were in no way responsible for the dispute, said Jon Gold, supply chain vice president for the National Retail Federation in Washington, D.C.

“We don’t think that’s fair,” Gold said. “Isn’t that the terminal’s fault? We recognize the right to collective bargaining, but there has to be a better way to deal with these issues.”

The dispute caused massive delays in the delivery of some goods, as ships lined up offshore and goods piled up on dock. Some of those delays are still being resolved, according to several panelists.

Everyone agreed that the logistics industry must work as a team to prevent future labor strife at the ports, but one panelist reminded everyone that problems moving goods from the ports to the warehouse-distribution facility aren’t anything new.

“This didn’t start with the labor issues,” said B.J. Patterson, president and chief executive officer of Pacific Mountain Logistics. “That only made it worse, but these problems have been around a long time.”

In separate session that discussed how the state and local government can best help the logistics, an official with the Southern California Association of Governments repeated a familiar refrain: California needs to spend more on infrastructure – $296 billion, to be exact – and the sooner the better.

Pouring that much money into public works projects that would upgrade roads, highways and bridges would at least bring California’s infrastructure up to the standards outlined in a recent report by the California Transportation Commission, said Hasan Ikhrata, the association’s executive director.

“That will just get us up to par,” Ikhrata said. “There are times when the government should stay out of the way and let the market take care of things, but not this time. Better infrastructure means a better business climate.”

Ikhrata, who predicted that driverless cars will begin appearing on streets and highways soon, said California could improve its business climate by overhauling its environmental quality act, or CEQA, which some members of the business community believe benefits attorneys more than it does the environment.

He also accused federal lawmakers of withholding funds for various transportation improvements, including the repair of approximately 2,300 bridges in Southern California.

“It’s been very disappointing to be Washington, D.C., during the past few years,” said Ikhrata, who flew in from the nation’s capital Thursday morning to attend the logistics conference. “It’s so polarized, nothing gets done. The two sides don’t talk to each other.”

Several sessions dealt specifically with some of the technological advances that are changing the logistics industry.

During the day’s final conference, Iddo Benzeevi, president and chief executive officer of Highland Fairview, an industrial development company based in Moreno Valley, said logistics is becoming more high-tech in part because of the large fulfillment centers that deliver online orders the same day they’re filed.

Benzeevi acknowledged that some manufacturing jobs have gone away because of automation, but said gains in technology have made up for those losses.

The event was held at the Sheraton Fairplex Convention Center. It was co-sponsored by the Center for Supply Chain & Logistics at the Drucker School of Management and the Inland Empire Economic Partnership.