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With Eye on Global Supply Chain, Port of LA Unveils New Budget

Although this is a 2.3 percent or $22.5 million decrease from the current FY adopted budget – the port maintains that it is a tactical move shore up existing infrastructure

By ·

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In a preemptive move to protect its market share, the Los Angeles Harbor Commission adopted a 2012-13 fiscal year (FY) budget last week of approximately $954.1 million for the Port of Los Angeles.

Although this is a 2.3 percent or $22.5 million decrease from the current FY adopted budget – the port maintains that it is a tactical move shore up existing infrastructure.

“We recognize that the Panama Canal expansion poses a threat to all West Coast ports,” said Director of Communications Philip Sanfield, “but we are not going to remain passive in a down year.”

The modest decline reflects conservative estimates of relatively flat operating revenues while the economy remains in recovery and controlled operating expenses aligned with the Port’s financial priorities adopted in its 2012-17 Strategic Plan.

“We are entering a new era in international trade, and this budget reflects our values and priorities for remaining America’s No. 1 trade gateway,” said Harbor Commission President Cindy Miscikowski. “While the budget is a one-year document, our focus is long-term.”

In the current fiscal year, the port has maintained its leadership position as the nation’s busiest container gateway. Despite continued economic challenges in the U.S. and around the world, the port saw a 1.4 percent increase in containerized cargo in Calendar Year (CY) 2011 compared with the prior year. The port also retained its AA Bond rating.  This is the highest credit rating for any stand-alone U.S. port and reflects confidence of the rating agency in the financial strength of the port.

The port’s 2012-13 FY budget anticipates operating revenues of $398.6 million, about the same level compared with the current fiscal year. It projects an $8.3 million or 4 percent increase in total estimated expenditures from the current fiscal year. Despite the slight increase, total expenditures for 2012-13 remain lower than the adopted budget for 2011-12.

Vital to maintaining competitive operations, a capital budget of $285.7 million has been approved. Infrastructure investments for FY 2012-13 include $132 million in development projects at existing terminals such as the TraPac Container Terminal, the China Shipping Container Terminal and the APL facility at Berths 301-306. Another $80.4 million is allocated for transportation projects to improve the movement of goods and vehicular traffic within the Port and on surrounding roads and highways, and $19.2 million is dedicated to L.A. Waterfront development projects.

The FY 2012-13 budget reflects the port’s commitment to maximizing its resources by continuing to pursue available grants. In the new fiscal year, the port is due to receive $81 million in state and federal grant reimbursements, more than half of which supports critical security projects that protect the harbor community and the economic interests of the Port and its stakeholders. Overall, the port manages approximately $437 million


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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Article Topics

Economy · Trade · Transportation · All Topics
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