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Long Beach Chamber Statement in Support of the Middle Harbor Redevelopment Project

Long Beach Area Chamber of Commerce President and CEO Randy Gordon testifies at the Long Beach Harbor Commission meeting this morning in support of the Middle Harbor Development Project.

The statement is provided below:

Good morning President Hankla and members of the Harbor Commission. I am Randy Gordon, President and CEO of the Long Beach Area Chamber of Commerce. I am here this morning, on behalf of the Chamber, in support of the Middle Harbor Development Project.

The Chamber supports this Project because it will create jobs, improve freight mobility and help improve air quality in the City of Long Beach and the region.

Currently, our Port operations support nearly one in eight or over 30,000 jobs throughout our City and approximately 315,000 jobs or 1 in 29 in Southern California. Cargo volumes have decreased significantly over the last year, impacting thousands of workers whose jobs are directly and indirectly related to port operations.

According to recent data, there’s been a 40% drop in cargo volumes at the Port of Long Beach. This is the lowest level since 2004. Local state and federal leaders, including President Obama and our Mayor Bob Foster, have talked about the importance of moving forward with responsible projects, like the Middle Harbor, that will help to preserve and create jobs.

This Project is expected to create 14,000 new, permanent jobs in Southern California most of which will be created right here in the Greater Long Beach area at a time when jobs are needed more than ever.

It is also expected to create 1,000 temporary construction jobs per year for 10 years.
Preserving and creating maritime jobs in Long Beach means that additional dollars will be spent in the local Long Beach economy thereby supporting Long Beach businesses and strengthening our local economy.

Furthermore, the Project will keep cargo and businesses thriving in Long Beach allowing goods to move greenly. The Project includes redeveloping the California United Terminals (CUT) and Long Beach Container Terminal (LBCT), which are two of the oldest and most inefficient terminals in Long Beach.

Redeveloping these terminals as part of this project will be the model for green seaport facilities in the world and will improve the Port’s ability to move cargo more efficiently. The Project also supports your Green Port Policy and the Clean Air Action Plan’s efforts to improve air quality.

The Chamber strongly supports responsible projects, such as Middle Harbor, that will reduce emissions from port operations. Some specific examples of how Middle Harbor will improve our region’s air quality through a variety of mitigation efforts include: Cold-ironing at the berth to dramatically reduce emissions from oceangoing vessels, which are the largest contributors of diesel emissions in the Port. Cold-ironing one ship for one day is the equivalent of removing 33,000 cars off Southern California roads. Electric Rail-Mounted Gantry Cranes will provide significant health benefits for crane operators.
 

Expanded on-dock rail will shift more than 30 percent of the cargo shipments from trucks to trains, reducing emissions and improving regional traffic safety and efficiency.

Because of the environmental mitigations in place, the Middle Harbor Project will reduce emission levels by half at the end of construction, despite the increase in cargo volume. All of these measures will significantly improve the quality of life for the Greater Long Beach Community – especially for the neighborhoods closest to the port complex.

The Chamber urges your support for the Middle Harbor Redevelopment Project to bring desperately needed jobs and economic benefits to Long Beach while improving regional air quality.

This project is a win-win for everyone because it will give us the opportunity to continue to be a vital asset to the local and national economy; help improve air quality and the goods movement system, while creating thousands of good paying jobs.

If you sent out a poll to everyone in Long Beach that asked what they believed was the most important issue in the city today, no doubt that "Jobs" would be at the top of the list.

California's unemployment rate has skyrocketed in the past year, and Long Beach's is even higher. It's the worst employment decline in more than a decade; but hope is alive thanks to one of the community's oldest residents.

The Port of Long Beach has steadily employed residents of Long Beach and the surrounding region for more than a century. Despite drastic economic conditions, the Port remains committed to providing employment. Hosted by The Chamber’s International Business Association, the State of the Port address was held in January, and the issue of employment was stressed again and again. During Executive Director Richard Steinke's speech, he reaffirmed the Port's commitment to proceeding with modernization and environmental efficiency projects that will provide thousands of jobs for Long Beach and our region.

Long Beach has prided itself on being a place that can provide secure, high-paying jobs to those who are willing to work hard. The Port's slew of projects that will continue, despite economic hardship, will require months and even years of construction. It is the people of Long Beach that will benefit most – with a place to find steady work during difficult times, and a partner in the Port who is committed to improving the community's environment.

When completed, the Middle Harbor Redevelopment Project (MHRP) will allow a new terminal to move twice as many goods with half the pollution. This project proves the Port's commitment to expanding business operations and improving their community. The MHRP and infrastructure projects like it will provide an estimated 1,000 jobs a year and more than 14,000 jobs once the construction is completed.

The Port has been a valuable business partner to Long Beach – and indeed, the nation – for decades. In these difficult times, they continue their ongoing commitment to the community by pushing forward with multi-billion dollar projects that will employ local residents for years to come. In the process, we will all enjoy cleaner air and water, and when the economy rights itself and the goods movement industry takes off yet again, the Port of Long Beach will be well-equipped for its high demands…

Long Beach Chamber President and CEO, Randy Gordon, released the following statement in support of the Intermodal Container Transfer Facility Modernization Plan Environmental Impact Report (EIR):

Late last year, the Long Beach Chamber assembled its most involved businesses and developed a clear and focused list of strategic public policy initiatives for 2009. Two such initiatives bring me here tonight to express the Chamber’s support for moving forward with the Modernization Plan’s EIR.

First, the Long Beach business community must determine which business sectors currently drive our local economy and seek ways to support their efforts. It should be clear to you that both this project and Union Pacific are important components in driving our local economy. When this project is approved and allowed to proceed, it will provide badly needed construction jobs.

And, second, we must support our business community’s efforts to invest in green technology. I applaud Union Pacific’s commitment to making this project environmentally friendly as possible. This project will reduce emissions by replacing diesel-powered equipment with electric-powered equipment. Provide additional near-dock rail and container capacity by increasing operation efficiencies. Continue to promote the direct transfer of cargo from port to rail with minimal surface transportation congestion or delays. And, it will provide enhanced cargo security through new technologies.

Finally, upon completion, this project is estimated to reduce its on-site diesel emissions by approximately 74 percent and emissions of oxides of nitrogen by more than 55 percent, from 2005 levels.

It is clear to the Chamber and by reading the Project Description that this project deserves to move forward. Businesses such as Union Pacific and their employees help drive our local economy. They need us now more than ever.
 

Chamber Supports BNSF Project, Improves Traffic and Goods Movement

As one of the busiest ports in the world, the Long Beach Chamber supported moving forward with an environmental impact report (EIR) that will allow BNSF Railway to construct the Southern California International Gateway (SCIG) near the Long Beach Port. The SCIG will establish a near-dock facility that will allow fewer trucks on the 710 Freeway while at the same time improving air quality in the region. Once the EIR is finished it will be available for public comment and is one of the final hurdles to start the project.

“BNSF Railway’s project is designed to improve goods movement within the port area and alleviate some of the trucks and traffic we all experience when traveling on the 710 freeway,” stated Randy Gordon, President and CEO of the Long Beach Chamber. “The project also has implications of being green “ready” and lessening the impact on the surrounding environment,” Gordon continued.

The SCIG will utilize existing capacity in the Alameda Corridor while taking trucks off of the 710 freeway. According to reports by BNSF Railway, the ports’ cargo volume has tripled since 1995 and is expected to double again by 2015. The SCIG will attempt to meet the rising demands of cargo volume while keeping conscience of the impact on surrounding communities. BNSF Railway has been proactive in seeking community input, which it has received, and has adjusted the SCIG to conform to the request of many community members. Sound walls, new and cleaner trucks used in and around the near-dock facility and workforce-training programs are just some of the enhancements BNSF Railway has agreed to with help from the community.

The current status of the project consists of all public scope meetings have been held after the issuance of a notice of preparation for the EIR along with the required public review period. Once the EIR is released the public may comment on the report. The earliest the facility could open is in 2010.
 

Long Beach Chamber Opposes Federal Rail Legislation

The Long Beach Chamber of Commerce took a stance against two pieces of Federal legislation that would re-regulate freight railroads.  S. 953 and H.R. 2125 would essentially turn back clocks to a time when the rails were regulated and revenues and earnings were at a low.

S. 953 and H.R. 2125 contain many counter-intuitive elements.  One allows the board to find anticompetitive actions by a rail carrier without any evidence of anti-competitive activities being presented.  It also requires that rail carriers (which may have built certain rail lines) be forced to share those lines with competitors.  This is something that is now accomplished on a cooperative and voluntary basis, and under these bills, would no longer be a choice.

Since rail was largely deregulated in 1980, rail service has improved, rail productivity has gone way up and average rates have gone down.

Productivity is up 168%.  Railroad productivity improvement (measured in revenue ton-miles per constant dollar operating expense) has been among the highest of all U.S. industries.

Volume (revenue ton-miles) is up 86%.

Revenue (inflation-adjusted operating revenue) is down 21%.

Rail rates (inflation-adjusted revenue per ton-mile) are down 57%, even after an increase in average rates in 2005.  These rate reductions have directly translated into $10 billion or more per year in savings for U.S. businesses and consumers.

Reregulation would mean lower prices for select shippers in the short term and severe consequences for all shippers over time.  As past experience has shown, excessive regulation would lead to lower rail revenue, which would cause a capital drain and disinvestment.  In short, re-regulation would shrink rail capacity when the nation needs more as the US Department of Transportation has estimated.  In fact, it has estimated a 70 percent increase in freight demand by 2020.  These bills would be the beginning of the end, again, as railroads would be unable to cover their costs and the meet our transportation needs.

Letter to Congresswoman Laura Richardson

November 5, 2007

The Honorable Laura Richardson
United States House of Representatives
Washington, DC 20515-0001
VIA FAX: (202) 225-7926

Dear Representative Richardson,

The Long Beach Area Chamber of Commerce is OPPOSED to S. 953 and H.R. 2125 which would re-regulate freight railroads.

Both pieces of legislation contain many counter-intuitive elements. One allows the board to find anticompetitive actions by a rail carrier without any evidence of anti-competitive activities being presented. It also requires that rail carriers (which may have built certain rail lines) be forced to share those lines with competitors; thus, something now accomplished on a cooperative and voluntary basis would, under these bills, no longer be a choice.

Reregulation would mean lower prices for select shippers in the short term and severe consequences for all shippers over time. As past experience shows, excessive regulation would lead to lower rail revenue, which would cause a capital drain and disinvestment. In short, re-regulation would shrink rail capacity when the nation needs more.
Since rail was largely deregulated in 1980, rail service has improved, rail productivity has gone way up and average rates have gone down.

- Productivity is up 168%. Railroad productivity improvement (measured in revenue ton-miles per constant dollar operating expense) has been among the highest of all U.S. industries.

- Volume (revenue ton-miles) is up 86%.

- Revenue (inflation-adjusted operating revenue) is down 21%.

- Rail rates (inflation-adjusted revenue per ton-mile) are down 57%, even after an increase in average rates in 2005. These rate reductions have directly translated into $10 billion or more per year in savings for U.S. businesses and consumers.

The US Department of Transportation estimates that there will be a 70 percent increase in freight demand by 2020. The American Association of State Highway and Transportation Officials (AASHTO) calls for increased public and private investment in freight rail infrastructure to meet the nation’s looming and complex mobility challenges. While highways carry the majority of freight in this country and will continue to do so, we can lessen the impact of highway congestion and improve quality of life by shipping more freight by rail.

Reregulation would turn back the clock on these successes and again give regulators wide control over crucial areas of rail operations. Reregulation would result in sharply lower rail revenues and earnings. Railroads would be unable to cover their costs and meet the transportation needs of our nation.

For these reasons, the Long Beach Chamber must OPPOSE S. 953 and H.R. 2125. We are available to discuss our concerns with you or your staff at your convenience.

Sincerely,

Randy Gordon
President/CEO
 

The objective of this policy briefing is to communicate the Long Beach Area Chamber of Commerce’s position on assessing container fees at the San Pedro Port/Port of Oakland to satisfy the media’s inquiry into this area.
 

Position: Oppose

Background

Senate Bill (SB) 974, (formerly SB 927) is a bill by state Sen. Alan Lowenthal, D-27th, that would assess a fee on cargo that passes through the ports of Long Beach, Los Angeles and Oakland, which would be used for enhancing security, reducing air pollution and improving infrastructure.

The business community throughout the entire Pacific Northwest is in a situation where we really need to band together and organize our activities in opposition to this legislation. Therefore, the Chamber has joined a coalition, including the California Chamber of Commerce, which opposes SB 974. This Bill imposes a tax on containerized cargo that is being shipped in to or out of the aforementioned ports. This means that members of the Chamber who export any goods through these ports, or receive goods that are imported through these ports, will be facing new costs. This is a $500 Million per year tax on business. Finally, the State Legislatures of Hawaii and Alaska have signaled that they will sue the state of California for violation of the 10th Amendment of the US Constitution (Interstate Commerce Clause).

What other groups oppose the bill?

California Chamber of Commerce
California Retailers Association
National Retail Federation
Retail Industry Leaders Association
American Apparel and Footwear Association
Pacific Merchant Shipping Association
United States Council for International Business
California Manufacturers & Technology Association
National Association of Manufacturers
International Association of Automobile Manufacturers
American Electronics Association
California Farm Bureau Federation
Western Growers
Agricultural Council of California
Wine Institute
California Cotton Ginners and Growers Association
California Grape and Tree Fruit League
California Citrus Mutual
California Grocers Association
California Business Properties Association
National Association of Industrial and Office Properties – California
NAOIP Inland Empire
NAOIP SoCal
American Chemistry Council
California League of Food Processors
Nisei Farmers League
California Cattlemen’s Association
Travel Goods Association
American Import Shippers Association
California Railroad Industry
California Metals Coalition
Redondo Beach Chamber of Commerce and Visitors Bureau
Temecula Valley Chamber of Commerce
Murrieta Chamber of Commerce
Lake Elsinore Valley Chamber of Commerce
Southwest California Legislative Council
Corona Chamber of Commerce
Voit Development Company
Hedley Construction and Devlopment
Wal Mart Stores, Inc.
Nike
Gap, Inc.
Target
Sonnet Technologies
Home Depot
Blue Diamond Growers
Securakey
Anheuser-Busch Companies, Inc.

Issues

What is the gist of the bill?

Goods Movement Consumer Fee - Increases the cost of exporting and importing goods in California by assessing a container fee of $30 per twenty foot equivalent unit (TEU) and $60 per forty foot equivalent unit (FEU) on goods processed through the Los Angeles and Long Beach ports.

What is the Interstate Commerce Clause?

Article I, Section 8, Clause 3 of the United States Constitution, known as the Commerce Clause, empowers the United States Congress "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

In Gibbons v. Ogden (1824), Chief Justice John Marshall ruled that the power to regulate interstate commerce also included the power to regulate interstate navigation. Accordingly, if SB 974 becomes law, the states of Alaska and Hawaii have a valid judicial grievance with the state of California, given the economic dependence of these states on the San Pedro and Oakland Ports.
 

The significance of the Commerce Clause over this measure cannot be emphasized enough, due to the financial drain that will ensue in other states, especially that of Alaska and Hawaii. The Commerce Clause is an important source of powers delegated to Congress, and therefore its interpretation is very important in determining the scope of federal legislative power, and the limits to the power conferred upon the state of California in regard to assessing shipping/trade fees and duties on other states.
 

Essentially, if passed and signed into law, this will set off a legal battle between states that can only be decided by the US Supreme Court. Under Chief Justice Roberts, it is likely that the court will weigh in favor of Congress’ right to regulate commerce among the states, in deference to case law established under Gibbons v. Ogden.

What happened to SB 760 and SB 927?

The original container fee bill that Lowenthal was pushing, SB 760, didn’t make it out of the suspense file—effectively killing the bill. Lowenthal reacted by gutting and amending SB 927 adding the provision that ports would collect the fee from cargo owners instead of from terminal operators. Finally, SB 927 exempted the Port of Oakland from the fee.

SB 927had two problems: the Governor vowed not to sign “gut and amended bills” upon taking office; moreover, the Governor vetoed similar legislation earlier in the year. After passing both houses last fall, SB 927 was met with a gubernatorial veto.

How would the money be split?

The fees would be split in thirds: port security, environmental mitigation, and infrastructure (sans roadways).

Where does the Governor stand on SB 927 and what is the likelihood of it getting signed into law?

The fate of the new bill (SB 974) is uncertain, given that the Governor will not have to stand for re-election. Other factors that could influence the bills passage include Lowenthal’s decision to include the Port of Oakland—effectively taking the wind out of the “equal footing” argument. Additionally, with the passage of AB 32 (Nunez), Governor Schwarzenegger could sign SB 974 in an attempt at securing his legacy as a Teddy Roosevelt environmentalist/conservative. Conversely, in light of the Governor signing AB 32 into law, he has solid environmentalist credentials, should he be seeking a “legacy” item. What is certain is that this bill will more than likely pass both houses of the Legislature with relative ease.

Talking Points

- This bill violates the United States Constitution and breaches basic international law by imposing a TAX on each shipping container processed at the Ports of Los Angeles and Long Beach;
 

- The HALF-BILLION DOLLAR CONSUMER TAX on exports and imports imposed by this bill will drive economic activity from California to neighboring states and countries and is ill-timed, especially in light of the Legislature's passage of nearly $20 billion in bonds to improve the state's transportation infrastructure system;
 

- Passage of the bonds last November, and the continued pursuit of public-private partnerships already encourage significant additional investment by the private sector, local jurisdictions, and the federal government;
 

- The Chamber along with several other associations has opposed the legislation as not being sufficiently explicit regarding the collection and disbursement of fees. Efforts will be made by the same interests that have opposed the legislation to ask California Governor Schwarzenegger to veto the bill.
 

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Long Beach Area Chamber of Commerce | One World Trade Center, Suite 206 | Long Beach, California 90831 | (562) 983-1241 | Contact