Searchable Goods Movement Timeline

Welcome to the METRANS Goods Movement Timeline. This is a searchable timeline of activities tied to goods movement, logistics and international trade based upon items from the popular press.

Given our location and the importance of this region as an international trade gateway, many of the entries pertain to Southern California. We do however draw from state and national press as well. Some articles' links may have expired, or you may have to pay a fee or register on the Web site where they originally appeared to access the complete article. Our goal however is to provide the researcher with enough information to track significant events over time as they have occurred in key areas like legislation, finance, and security.

This timeline grew out of timelines initially developed for METRANS research projects in the area of goods movement. Earlier entries (before 2005) were therefore not prepared with a searchable database in mind and will be less detailed. We hope, however, that they remain a useful resource.

Search Filter

Date range:
to
Date Headline Source
May 04, 2016

California releases sustainable freight action plan

Online Edition

The heads of several California state agencies have released a draft California Sustainable Freight Action Plan.

The plan was developed in response to an order from Governor Jerry Brown last July that directed state agencies to "improve freight efficiency, transition to zero-emission technologies and increase the competitiveness of California's freight system."

The plan recommends:
     • A long-term 2050 vision and guiding principles for California's future freight transport system;
     • Targets for 2030 to guide the State toward meeting that long-term vision;
     • Improving freight system efficiency 25 percent by “increasing the value of goods and services produced from the freight sector, relative to the amount of carbon that it produces by 2030”;
     • Deploying over 100,000 zero-emission freight vehicles and equipment and maximizing near-zero equipment and equipment powered by renewable energy by 2030.
     • And fostering future economic growth within the freight and goods movement industry by promoting flexibility, efficiency, investment, and best business practices through state policies and programs that create a positive environment for growing freight volumes, while working with industry to lessen immediate potential negative economic impacts.

California says while freight transport is a major economic engine for the state, emissions from ships, harbor craft, trucks, locomotives, cargo equipment, aircraft and other freight participants account for about half of toxic diesel particulate matter (PM 2.5), 45 percent of the emissions of nitrogen oxides that form ozone and fine particulate matter in the atmosphere, and 6 percent of all greenhouse gas emissions in California.

The state is inviting comment on the plan from industry stakeholders and the general public through July 6.

Online Edition

The heads of several California state agencies have released a draft California Sustainable Freight Action Plan.

The plan was developed in response to an order from Governor Jerry Brown last July that directed state agencies to "improve freight efficiency, transition to zero-emission technologies and increase the competitiveness of California's freight system."

May 03, 2016

FMC Chairman backs USCG position on container weight regulations

Online Edition

Federal Maritime Commission (FMC) Chairman Mario Cordero commended the Coast Guard for issuing a bulletin last week on how shippers can comply with the new requirement that shippers provide the verified gross mass of containers before they are loaded on ships.

The container weight requirement is part of new amendments to the International Maritime Organization’s Safety of Life at Sea Treaty (SOLAS) that come into force on July 1.

“I commend the Coast Guard for issuing its Marine Safety Information Bulletin last week declaring ‘...the United States has determined that the regulatory regime in the United States for providing verified weights of containers to ship Masters is equivalent to the requirements provided for...’ by SOLAS amendments,” said Cordero.

“I hope this action permits shippers, carriers, and marine terminal operators to have the knowledge necessary to continue to move cargo efficiently, reliably, and without interruption come July 1st.”

Cordero was in Oakland, Calif. to participate in a panel discussion about the SOLAS rule during a luncheon hosted by Women in Logistics (WIL) and the Warehouse Education and Research Council (WERC).

The Coast Guard bulletin and declaration of equivalency filed with the IMO, “seems to allow for more flexibility than people thought,” he said in an interview before the luncheon.

In addition to having shippers weigh a loaded container or adding the weight of the contents of the container (cargo and dunnage) to the tare weight of the containers and submitting that weight to the carrier, the Coast Guard said last week, “Shippers, carriers, terminals, and maritime associations have outlined multiple acceptable methods for providing verified gross mass (VGM)."

"A couple examples are: (1) the terminal weighs the container, and when duly authorized, verifies the VGM on behalf of the shipper, and (2) the shipper and carrier reach agreement whereby the shipper verifies the weight of the cargo, dunnage, and other securing material, and the container’s tare weight is provided and verified by the carrier,” USCG said in the bulletin.

Cordero noted though the FMC does not have jurisdiction over SOLAS, the agency has been actively trying facilitate discussions on how shippers can comply with the rule.

“Since the beginning of the year, we have tried to be of help on this issue through the forum we hosted at Commission headquarters in February, and via ongoing engagement of carriers, shippers, and terminal operators,” said Cordero. “Going forward we will continue to be engaged on this issue and remain willing to be of assistance should the need arise and our help is sought.”

“The bottom line is that it is a safety issue, and an issue that has been discussed for many years,” he added, noting that the IMO rule parallels the concerns about the weights of trucks and containers travelling over highways in the U.S

Maryanna Kersten, senior manager international logistics at Del Monte Foods, said that complying with the SOLAS VGM rule will be very complicated, very labor intensive and, as such, will increase overall transportation costs. She believes there is still a great deal of confusion and lack of understanding about the rule and its ramifications.

Kersten expressed concern about the rulemaking process at IMO, which has limited input from shippers, unlike the rulemaking processes at U.S. Customs and Department of Transportation.

If shippers had been more involved in developing the IMO rule, she suggested, “it might have addressed -- if that kind of dialog had started in 2001 -- the questions that we are dealing with now, 60 days before the implementation of this rule.”

Donald J. Kassilke, counsel for the Ocean Carrier Equipment Management Association (OCEMA), a group of 19 carriers who published a “best practices” document on how to deal with the SOLAS VGM requirement said that if there are shippers who cannot comply with those recommendations that they should speak with their customers.

Online Edition

Federal Maritime Commission (FMC) Chairman Mario Cordero commended the Coast Guard for issuing a bulletin last week on how shippers can comply with the new requirement that shippers provide the verified gross mass of containers before they are loaded on ships.

The container weight requirement is part of new amendments to the International Maritime Organization’s Safety of Life at Sea Treaty (SOLAS) that come into force on July 1.

May 06, 2016

Port of Charleston to provide verified box weight for $25 fee

Online Edition

The South Carolina Ports Authority on Thursday said it will charge $25 to provide container weight verification on behalf of shippers at the Port of Charleston to comply with new international maritime safety regulations.

Last week, the U.S. Coast Guard announced its approval for U.S. ports to verify the weight of containers, saying that existing U.S. laws and regulations are equivalent to the upcoming regulation under the Safety of Life at Sea convention.

The Port of Charleston for years has weighed every export container received at its terminals on calibrated scales to meet Occupational Safety and Health Administration regulations requiring terminals to receive the gross weight of the container, or use its own scales to obtain the weight, before it is hoisted by any cargo handling equipment.

"It has been our position all along that we have employed a best practice in safely loading ships in our port for the last 20 years due to our weighing of all export containers," SCPA President Jim Newsome said in a statement.

More stringent rules that go into effect July 1 force shippers to provide the verified gross mass (VGM) of laden containers to the vessel operator in advance. The objective is to reduce the possibility of accidents from resulting from overweight containers creating vessel instability or falling from lift equipment at terminals by requiring accurate weight information instead of ballpark estimates, or deliberately falsified measurements, provided on the manifest.

The liner industry pushed for the changes through the United Nation's International Maritime Organization, of which the United States is a member.

The rule is technically directed at carriers by prohibiting them from loading a box without the certified container weight, but the responsibility mostly falls on exporters.

Under the IMO’s amended safety convention, shippers can weigh the loaded container or weight the cargo, including packing materials, and add it to the tare mass of the container. Shippers are allowed to use third parties to meet the requirement, but in all cases must sign the manifest, shipping instructions or separate document confirming the VGM. The option of adding the tare weight has proven controversial, with some exporters complaining it is unfair and burdensome for them to tally the weight of the empty box that belongs to the carrier.

If the shipper has no provision to weigh the container before its arrival at the port, weight verification can be completed at the terminal if there is calibrated and certified equipment, according to IMO rules.

In recent weeks, Newsome has made clear the SCPA would provide that information to shippers, if requested. On Thursday, his agency outlined in greater detail how the process will work.

All scales used to weight export containers at the North Charleston and Wando Welch terminals will be certified annually by the South Carolina Department of Agriculture. The port’s scales were last certified in January.

An export shipper that provides a timely request will receive the estimated gross weight of the container in the following way:

     • Gross weight of tractor (including estimate of fuel weight), container, chassis,and cargo will be determined by weighing the entire unit on the scale.

     • The computer system will automatically deduct the weight of the tractor, chassis, refrigerated generator set and fuel as provided by the truck driver to the interchange clerk, along with the posted tare weight of the chassis.

     • After these deductions, the gross weight of the container and cargo will be electronically provided to the shipper and the shipping line.         

While this approach conforms with the methodology outlined by the IMO Maritime Safety Committee in its "Guidelines Regarding the Verified Gross Mass of a Container Carrying Cargo" published June 9, 2014, in providing this weight, SCPA said it does not certify its accuracy. Rather, it is a best effort to ensure the provision of an accurate weight using the methodology above.

“It is the clear responsibility of the shipper to provide the required weight certification to the shipping line as specified in the SOLAS regulations,” the SCPA said. The export shipper will pay a fee of $25 per container weighed, it added, and billing and payment arrangements must be made prior to the provision of such services.

On Wednesday the Georgia Ports Authority said it would transmit VGM data to shippers and stevedores in real-time, free of charge, from the scales it already uses at inbound gates to weigh all export loads. And Ports America, the private operator of the Port of Baltimore’s Seagirt Terminal, said it would offer container weighing services for an undisclosed fee. Most terminals have said that they won’t even accept ocean boxes through their gates without weight documentation because they don’t want the hassle of storing them while that data is tracked down.

Online Edition

The South Carolina Ports Authority on Thursday said it will charge $25 to provide container weight verification on behalf of shippers at the Port of Charleston to comply with new international maritime safety regulations.

Last week, the U.S. Coast Guard announced its approval for U.S. ports to verify the weight of containers, saying that existing U.S. laws and regulations are equivalent to the upcoming regulation under the Safety of Life at Sea convention.

May 12, 2016

Port-Trucking Firms Run Into Labor Dispute

Print Edition

LOS ANGELES—The nation’s busiest ports are emerging as a key battleground in the legal fight over whether truck drivers should be counted as employees or independent contractors.

Several trucking companies operating at the ports of Long Beach and Los Angeles have filed for bankruptcy protection in recent months, citing mounting costs to settle hundreds of legal claims. These operators haul containers from the docks to rail yards and freight depots, a key journey of just a few miles that allows major retailers and manufacturers to quickly move their imported goods to stores and factories across the country.

The bankruptcies in the trucking sector come as some higher-profile cases in the debate over employee status are paying out hefty settlements. Ride-hailing service Uber Technologies Inc. agreed to pay as much as $100 million to drivers last month, and delivery company FedEx Corp. reached a $228 million settlement last year. But in the $12 billion-a-year port-trucking business, known as drayage, where hundreds of small operators compete on thin margins, the cost to settle similar claims can be overwhelming, analysts say.

The turmoil raises questions about the future of short-haul trucking at the nation’s ports. Litigation with drivers and the higher cost of full-time labor could force drayage operators to charge more for their services or it could put them out of business entirely, reducing the overall number of carriers and raising costs for shippers, analysts say.

The trucking industry is bracing for the classification fight to spread to other ports. “As most things go in trucking...California leads the way,” said Curtis Whalen of the American Trucking Associations, an industry group. “Having this hanging over your head is obviously not good.”

Since 2011, 799 complaints have been filed against port-trucking companies with the California Labor Commissioner’s Office, alleging drivers were misclassified as independent contractors and denied the wages and benefits afforded to full-time employees. A total of more than $35 million has been awarded to drivers in those cases, according to the Labor Commissioner’s Office.

Over a dozen class-action lawsuits alleging misclassification at the port-trucking companies are pending in California courts. And the National Labor Relations Board recently filed a complaint against a California port-trucking company that is one of the first to include the allegation that drivers’ misclassification as independent contractors violates the National Labor Relations Act.

Some trucking companies say the drivers filing legal claims over misclassification amount to a relatively small number in the Southern California industry. “Most drivers aren’t looking to become employees,” said Weston LaBar, executive director of the Harbor Trucking Association, which represents trucking companies at the ports of Los Angeles and Long Beach.

Noel Perry, an economist with FTR Transportation Intelligence, a freight-market analysis firm, estimates that there are about 2,000 port-trucking companies nationally. Drayage companies tend to be small, running 100 trucks or fewer.

Publicly traded logistics company Hub Group Inc. recently closed its Southern California ports operation, a little over a year after converting the local fleet from independent contractors to full-time drivers, citing “unsustainable” costs.

Last month Pacific 9 Transportation filed for bankruptcy protection, citing among its debts nearly $7 million it owes to drivers after losing several claims before the state labor commissioner. Premium Transportation Services Inc., one of the largest port-trucking businesses in Southern California, filed for bankruptcy protection in March, telling the court it couldn’t afford the costs of litigation with drivers. A handful of other port-trucking companies in California have made similar claims in bankruptcy filings in recent years, and some have shut down.

“Unless everybody else is forced to use the same [full-time] labor, these companies won’t be able to raise their prices to pay for it,” said FTR’s Mr. Perry.

As many as 25,000 drayage drivers, the vast majority of them independent, make the trek to and from port terminals in California every day. For many of them, their independent status means they can theoretically make more money than full-time employee drivers, depending on how many loads they carry each day.

Justice for Port Drivers, a campaign supported by the International Brotherhood of Teamsters, is organizing drayage drivers at ports around the country—most heavily in Southern California. The organizers say that trucking companies push their costs, such as fuel, insurance, maintenance and lease payments, onto the drivers. And they say they’re not compensated for many of the hours they work, such as the time spent waiting in line to pick up goods.

Drivers at drayage firms owned by XPO Logistics Inc. say they were improperly classified as contractors and are owed up to $200 million in unpaid wages. A handful attended the company’s annual shareholder meeting on Wednesday to voice their concerns.

“We have excellent relationships with our employees and the owner operators who serve our customers,” an XPO spokesman said on Tuesday.

The California Labor Commissioner’s Office last week began offering port-trucking companies “amnesty” from any penalties they’ve incurred for misclassifying drivers if they voluntarily make their drivers full-time employees and provide back pay. The state Department of Industrial Relations said Tuesday that no companies have applied for the program so far.

Jackie Mattare, president of trucking company Desert Express, said she has employed full-time drivers for 20 years and she thinks other operators should, too. If everyone faced the same employment costs, rates for drayage services wouldn’t be so low, Ms. Mattare said, “and the industry will become a safer and more viable place to work.”

—Loretta Chao contributed to this article.

Write to Erica E. Phillips at [email protected]

Print Edition

LOS ANGELES—The nation’s busiest ports are emerging as a key battleground in the legal fight over whether truck drivers should be counted as employees or independent contractors.

Apr 15, 2017

Tracking air quality block by block

Online Edition

OAKLAND >> A local environmental advocacy group last week launched a first-of-its kind monitoring project, installing air quality sensors in the densely packed neighborhoods near this city’s port to give the people who live and work there on-the-ground readings of pollutants that can seriously injure their health.

The West Oakland Environmental Indicators Project, in partnership with researchers at the University of California, Berkeley, installed the first 25 of the 100 sensors they plan to place in the area, whose residents have long been burdened by diesel pollution from ships, trains and heavy-duty trucks coming in and out of the port. The devices will be stationed in the residents’ yards, schools, senior centers and businesses.

Diesel pollution accounts for about 70 percent of the known cancer risk related to air toxins in California, according to the state Air Resources Board. The health effects of diesel also include chronic heart and lung diseases, such as asthma and chronic obstructive pulmonary disease (COPD), as well as decreased lung function in children. These, in turn, can lead to ER visits, hospitalizations and premature deaths.

Oakland’s asthma rate in children (19 percent) and adults (16 percent) is on par with Alameda County, where the city is located. But, asthma rates are higher for children in West Oakland, near the port, where the number of kids diagnosed with the disease is nearly 21 percent, according to data from the California Health Interview Survey (AskCHIS, 2014). Statewide, 15 percent of children and 14 percent of adults have had an asthma diagnosis.

The rate of asthma-related emergency room visits is nearly twice as high in Oakland as in Alameda County, according to the county health department.

California has reduced diesel pollution in a number of ways, including programs to retrofit trucks with equipment that makes them run more cleanly and a gradual phaseout of older trucks. Since 1990, diesel pollution in the state has decreased by 68 percent, according to the Air Resources Board.

Government and business investments to clean up trains, ships and trucks operating at the Port of Oakland have dramatically reduced diesel particle emissions there by 75 percent since 2015, according to a report released last year by the port.

However, the passage of a sweeping gas tax bill by state lawmakers last Thursday to pay for road repairs contains a provision that could make it harder for the state to regulate emissions from the trucking industry.

Brian Beveridge, co-founder of the West Oakland Environmental Indicators Project, says diesel pollution from port activities must be further reduced.

Last week, the West Oakland Environmental Indicators Project filed a federal complaint, alleging that by forging ahead with a planned port expansion, the city and Port of Oakland are ignoring the disproportionate health impacts on West Oakland residents. Half of the residents are African-American, and the neighborhood has one of the highest poverty rates in the county.

Beveridge says people in West Oakland are still concerned about the dangers of dirty air, and they think more detailed monitoring is needed to clearly understand the quality of the air they are breathing.

California Healthline interviewed Beveridge. His comments have been edited for length and clarity.

Q What are the sources of pollution in the neighborhood?

A West Oakland is surrounded by three freeways. The primary route for trucks is Interstate 880 on the south and west sides of the community and upwind of West Oakland. The biggest sources of diesel and fuel oil emissions are the port and its various activities — ships, cargo handling equipment, railroads and trucks. The freeway is next, upwind of the neighborhood.

Q What do we know about exposure to diesel pollution and health?

A Diesel pollution has been known for a decade to have a significant health impact. Today, it’s seen as a cause of asthma, of COPD, lung cancer and brain cancer — because they found a component in diesel emissions that can cross over the blood-brain barrier. The U.S. Environmental Protection Agency said that diesel emissions nationwide were potentially the cause of 85 percent of all respiratory illness in the country. Millions and millions of people suffering from completely preventable illnesses.

Q What has California done to address the problem of dirty diesel?

A In the early 2000s, the state needed to rebuild the freight infrastructure — freeways, bridges, railways and ports. Moving cargo was becoming a key industry in California. [The state] set a target of reducing diesel emissions by 85 percent of 1994 levels, so we’re still trying to reach that 85 percent reduction.

In 2008, the trucks carrying cargo were targeted first because they operate so close to port and fenceline communities. For a year, the state provided incentives for the trucking industry to upgrade their hardware. … In [the Port of] Oakland, [the state provided] $30 million to $40 million to help truckers buy diesel particulate filters (DPS). Those filters used new technology to reduce diesel emissions from trucks by 85 percent, and older trucks were phased out.

Q There’s been progress on cleaning up the air, but is there still a problem?

A Even though the port projects will achieve the 85 percent goal by about 2020, because of cargo volume growth, it will exceed [the emissions cap set by] those goals again by 2028. … [Even with the 85 percent reduction], the 15 percent left over is still a significant amount if you look at it in aggregate, [and] that number will grow.

Q Why is additional air monitoring in the neighborhood needed, and what data will be collected?

A The current project is an attempt to look at the finely granular picture of air quality on the ground where people live. The regulatory agencies set ambient air standards to regulate air quality. That means they rely on a broad network of monitoring stations about every 2 kilometers to determine the air quality in the region.

We’ve always felt measuring and regulating ambient air doesn’t do much for people who live next to power plant, a port or freeways, because these places are the sources of pollution. [Regulators should] look at the source [of pollution] and regulate cleaning up the source of the problem. That’s been quite a struggle. When you talk about sources of pollution, you’re talking about industry spending money to clean emissions. It’s easier to talk about amorphous vehicle owners and freeways and make a rule for millions of people who own a car. Those people don’t fight back.

Q How will the data from personal air quality sensors be used?

A The monitoring project we’re doing now will take ambient air and break it into 100 little bits. What are we really breathing if we look carefully at local air in the front yard?

Our goal with the data is to take a better look at traffic and land use in the community, areas where cities do have some control. When you look at zoning — how cities zone properties for business [or residential] uses — it has a significant impact on a very hyperlocal scale. A couple of hundred feet can make a difference in terms of the quality of air people breathe.

We might want to regulate the placement of child care centers, senior centers, health centers or housing for that matter.

Q President Donald Trump has proposed slashing the EPA’s budget by nearly a third. How would that affect communities?

A The bottom line, if you roll back environmental protection, more people will get sick and die. Environmental protections initiated in this country during the past 50 years under [President] Richard Nixon cleaned up air and water. People who were drinking polluted water are now drinking clean water, and people who were breathing polluted air are now breathing clean air. What the [Trump] administration is doing now will cause people to die. That’s the simplest way to describe what is happening.

What the people following Donald Trump, the administration and business don’t understand is you can’t get smaller government and pay less taxes if you have millions of people going to the hospital because they don’t have money and showing up with environmental exposure. That’s how [former governor Arnold] Schwarzenegger was able to persuade a Republication legislature to do something [about diesel pollution]. He understood you can’t get smaller if the government is spending millions on public health. You can’t get a stronger economy if you have lost workdays because people are ill.

Online Edition

OAKLAND >> A local environmental advocacy group last week launched a first-of-its kind monitoring project, installing air quality sensors in the densely packed neighborhoods near this city’s port to give the people who live and work there on-the-ground readings of pollutants that can seriously injure their health.

Apr 15, 2017

5 toughest challenges that Southern California’s ports face in months ahead

Online Edition

Rough seas ahead? Mario Cordero knows that.

Cordero, former chair of the Federal Maritime Commission and longtime figure in the shipping industry, was chosen Friday to run the Port of Long Beach.

The cargo hub partners with the Port of Los Angeles to comprise the busiest port complex in the nation.

Cordero’s experience is deep, his expertise established. So he understands quite well that he — along with his L.A. peer, Gene Seroka — has challenges to face.

What’s on the horizon? Oh, only the shipping industry emerging from an international slump, a massive infrastructure project, looming labor contract talks and the tightening of already challenging environmental standards.

Good luck, sir.

Here are five of the most pressing scenarios awaiting the ports:

1. Regulation

The California Air Resources Board is in the midst of formulating new rules that could require all docked cargo vessels to cut emissions beyond levels that are already among the toughest in the nation.

Currently, 70 percent of all container and cruise ships must plug into electric power well at berth, but regulators want to see improvement by 2030.

Regulators also want terminal operators to replace many of the fossil-fuel-burning cranes, tractors, yard trucks and forklifts with cleaner-fueled alternatives.

Meanwhile, Gov. Jerry Brown is pushing for more zero-emission cargo trucks.

And the twin ports are developing new clean-air requirements aimed at reducing greenhouse gas and smog-forming particulates.

It won’t be cheap.

Consulting firm Moffat & Nichol estimates the price tag for the two ports and Oakland to replace equipment with all zero- or near zero-emission technology at $23 billion.

Sure, both ports have committed to the cleanup. But the question remains: Who will fund it?

2. Labor

Nobody wants a repeat of the crippling labor slowdown that rocked the docks in 2014 and 2015.

The standoff rippled through the nation’s economy, left businesses unable to stock shelves and stuck farmers with rotting produce on the idled docks.

By some estimates, the slowdown cost the economy more than $7 billion. And it marred the ports’ image among retailers and suppliers.

Delegates representing 20,000 International Longshore and Warehouse Union workers at 29 ports will meet at district headquarters in San Francisco in the coming weeks to discuss whether to extend their current five-year contract, which expires on July 1, 2019.

Last year, nearly two dozen members 0 Comments. Industry officials are watching closely.

3. Competition

The West Coast — once considered the natural route for cargo heading East — has been losing market share to hubs in the Gulf, on the Eastern seaboard and various points abroad.

More than a decade ago, around half of the nation’s imported goods came through the twin ports. Now, it’s 37 percent.

An expanded Panama Canal opened last year, intensifying fears that such retail giants as Wal-Mart and Home Depot could bypass Southern California’s ports.

But many of the Gulf and Eastern ports aren’t ready to handle many of the bigger ships with bigger loads the shippers are now using, that could be changing. They’re sinking billions into upgrading their infrastructure.

Meanwhile, there’s increased competition from Port Lázaro Cárdenas in Mexico and Prince Rupert in Canada.

To keep pace, both Long Beach and Los Angeles are upgrading their terminals.

A $4.5 billion infrastructure enhancement is underway in Long Beach, including an expanded, automated Middle Harbor Terminal.

But long-term planning in such an uncertain industry is tough. And incurring the debt for such projects can be risky.

4. Trade policy

Months ago, then-candidate Donald Trump said he would slap a 45 percent tariff on goods from China, the nation’s largest trading partner and the leading importer at the two local ports. And he vowed to label the Asian superpower a currency manipulator.

But last week now-President Trump met with Chinese President Xi Jinping at his resort in Florida. Perhaps now believing that coping with volatile North Korea calls for more Pacific Rim teamwork than he’d originally wagered, Trump has visibly softened his stances. And he hasn’t been afraid to say he’s open to changing his views.

Peter Navarro — the Team Trump insider with the most hard-line stand on China — appears to be taking a back seat to others with more moderate approaches.

That could be a good sign for trade-dependent California. And for retailers stocking shelves with lower-priced Made-in-China electronics and fashions. And for shippers at the ports whose job depends on Asian container traffic.

Port officials will surely lobby hard. But they likely won’t have much sway over the still-tough-to-predict actions of the new president.

5. Alliances

The cargo business made headlines last year. The wrong kind.

Hanjin Shipping melted down in public, stranding crews and ships packed with goods at ports around the globe — and revealing an industry in crisis.

Operating losses of $3.5 billion plagued the world’s biggest shippers.

In response, they created new alliances with competitors to cut costs and ease overcapacity.

Such agreements allow shipping lines to pool their resources and use one another’s vessels to move cargo.

Shippers allied in the three pacts now carry 90 percent of the goods along the Asia-North America route, giving them enormous power to shape the future of West Coast ports.

Companies working together can run fewer ships — but bigger ones packed with more boxes. In the months ahead, that could put pressure on dock crews to unload and load ships faster and more efficiently.

Fewer ships could also intensify competition between the Southern California ports.

The strength of the new alliances, however, could be tested. The U.S. is concerned the alliances could lead to anti-competitive behavior.

Last month, Reuters reported the Department of Justice served subpoenas to several executives at shipping lines as part of a price-fixing probe in the container industry.

Online Edition

Rough seas ahead? Mario Cordero knows that.

Cordero, former chair of the Federal Maritime Commission and longtime figure in the shipping industry, was chosen Friday to run the Port of Long Beach.

The cargo hub partners with the Port of Los Angeles to comprise the busiest port complex in the nation.

Cordero’s experience is deep, his expertise established. So he understands quite well that he — along with his L.A. peer, Gene Seroka — has challenges to face.

Apr 19, 2017

This hydrogen-fueled 18-wheeler at LA, Long Beach ports emits only water from tailpipe

Online Edition

Toyota delivered a zero-emissions 670-horsepower truck to the ports of Los Angeles and Long Beach on Wednesday that could ultimately reverse the region’s high cancer-causing pollution levels.

If the hydrogen-powered big rig performs well during a summer-long pilot test dubbed “Project Portal,” the new heavy-duty carrier could be the model to replace thousands of diesel trucks that pass to and from the twin ports daily.

• MORE PHOTOS: A closer look at the new hydrogen-powered trucks

“We’re honored to be Toyota’s test lab,” said Tony Gioiello, deputy executive director at the Port of Los Angeles. “Ultimately, our hope is in the coming years Toyota demonstrates the viability of this technology and helps us make the zero-emissions truck viable in the marketplace here at the nation’s largest port complex.”

Vehicles propelled by hydrogen don’t have the drawback of cumbersome batteries or molasses-slow charging sessions like all-electric cars.

The new truck’s electric motor is powered by hydrogen fuel cells that emit only water vapor and can travel up to 200 miles on one 20-minute charge.

Tesla CEO Elon Musk announced this week the company, which is based in Palo Alto and has a Hawthorne design studio, will debut a competitive, all-electric semi-trailer truck in September.

But Tesla officials declined to share details about the much-anticipated vehicle, or how it will overcome range limitations. For example, the smaller VIA Motors’ all-electric pickup only has a range of 40 miles per charge.

Toyota officials have been studying hydrogen-powered vehicle technology for 26 years and believe it is superior to all-electric models.

In 2014, the company launched its first hydrogen fuel-cell car, the Mirai. Torrance-based American Honda Motor Co. now has a competing hydrogen-powered car, the Clarity. But several manufacturers are pursuing the technology.

“I think it can potentially change the entire commercial industry,” said Bob Carter, executive vice president of Toyota Motor Sales based in Torrance. “This is on our journey to creating what we’ve been calling a broader hydrogen society. We believe this is going to have a distinct advantage” over electric vehicles.

“The concept is the same. The difference is that the fuel cells develop the electricity on board, as needed. You don’t have to have heavy, large, expensive batteries that take days to successfully recharge (a truck).”

Carter could not say how much a hydrogen-powered big rig would cost, but did predict it would be competitive with a new gasoline-powered truck if and when it hits market.

The shiny new truck is easy to distinguish for two reasons. It’s completely silent when running, and carries the slogan on its trailer: “A zero-emissions world: powered by Toyota hydrogen fuel cell technology.”

The emergence of this new clean-air vehicle capable of long-haul goods movement comes as state environmental regulators are working to expand a network of hydrogen-fueling stations statewide.

Janea Scott, a member of the California Energy Commission, said the agency is working to aggressively expand the state’s network of charging stations.

“California has some of the most aggressive climate goals in the nation, and we have federal clean-air standards to meet as well,” Scott said. “We are working with the Air Resources Board and Toyota to ensure we have an infrastructure in place to support hydrogen fuel-cell vehicles as they enter the market.”

Shell Oil also is helping to develop hydrogen-fueling infrastructure throughout California in partnership with the South Coast Air Quality Management District.

Hydrogen fuel-cell stacks can be fed water, natural gas or a variety of waste products.

“Hydrogen is the lightest element on Earth, it’s very abundant,” said Craig Scott, Toyota’s national manager of advanced technologies. “Landfill waste can easily be turned into hydrogen.”

The twin ports in Los Angeles and Long Beach are the largest stationary source of pollution in the region, according to air officials.

If the truck’s pilot test works well, the model could replace fleets of high-polluting diesel trucks that line up at the gates every day to ferry cargo containers filled with everything from furniture to power tools over to inland warehouses and then on to consumers and retailers.

An estimated 19,000 cargo containers move through the ports daily, carrying an estimate $450 billion worth of goods annually.

Black carbon, benzene, arsenic and formaldehyde can be readily found in the air around the ports, where cancer rates are higher than neighboring communities. Despite being the largest stationary source of pollution in the region, the twin ports have made strong inroads to cutting smog since enacting the Clean Air Action Plan in 2006.

Officials credit the effort with helping to reduce harmful diesel particulate matter by 85 percent — largely from diesel trucks — since it was first established.

At the heart of the plan was a clean-trucks program that forced thousands of truckers picking up cargo from the port daily to replace their oldest and dirtiest big rigs in their fleet with more efficient and less polluting models.

The ports estimate pollution from big rigs fell 90 percent after implementation, but the trucking industry has complained the high cost of replacing trucks has crippled some businesses.

“Our 2017 Clean Air Action Plan update proposes a gradual transition of the regional diesel-based fleet to near-zero emissions and ultimately zero-emission trucks,” Gioiello said. “To most people today, that is unimaginable. But that is where we’re headed.”

— Staff Writer Rachel Uranga contributed to this report.

Online Edition

Toyota delivered a zero-emissions 670-horsepower truck to the ports of Los Angeles and Long Beach on Wednesday that could ultimately reverse the region’s high cancer-causing pollution levels.

If the hydrogen-powered big rig performs well during a summer-long pilot test dubbed “Project Portal,” the new heavy-duty carrier could be the model to replace thousands of diesel trucks that pass to and from the twin ports daily.

• MORE PHOTOS: A closer look at the new hydrogen-powered trucks

Apr 13, 2017

Tesla plan puts clean-truck race into high gear

Online Edition

Tesla Inc. plans to unveil an electric cargo truck in September, Chief Executive Elon Musk said Thursday, heating up the race to get a zero-emissions semi-truck on the road.

“Tesla Semi truck unveil set for September,” Musk said on Twitter. “Team has done an amazing job. Seriously next level.” He did not provide any details, including when the truck would be available for purchase.

The truck would add to the ambitious production schedule underway at the Palo Alto automaker, which also is gearing up to build its widely anticipated Model 3 mid-market sedan.

Musk previously had indicated that the truck was coming and that it probably would have some autonomous-driving features.

Musk also tweeted Thursday that Tesla expects to unveil a pickup truck in 18 to 24 months.

In outlining the company’s “master plan” last July, Musk said heavy-duty trucks were among the other types of electric vehicles needed in the marketplace and that Tesla expected to unveil its truck this year.

“We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport, while increasing safety and making it really fun to operate,” he said then.

Others also are working on bringing a zero-emissions cargo truck to market, such as Mercedes-Benz and its Urban eTruck, and Nikola Motor Co.’s hydrogen fuel cell truck, which the company showcased in December.

Tesla’s stock closed Thursday at $304 a share, up $7.16.

Online Edition

Tesla Inc. plans to unveil an electric cargo truck in September, Chief Executive Elon Musk said Thursday, heating up the race to get a zero-emissions semi-truck on the road.

“Tesla Semi truck unveil set for September,” Musk said on Twitter. “Team has done an amazing job. Seriously next level.” He did not provide any details, including when the truck would be available for purchase.

Apr 10, 2017

Proposed Pier B Rail Project Jeopardizes Westside Businesses; Port Exec Emphasizes Commercial, Environmental Benefits

Print Edition

In Westside Long Beach, the tune of a dance that has been danced many times before is starting to crescendo. It’s a ditty both sides know by heart  - a delicate dialogue between the needs of the longtime businesses in the area and those of the port.

Since at least 2006, the Port of Long Beach has been considering ways to expand its on-dock rail infrastructure at Pier B. In December, the port released a draft environment impact report (EIR) for such a project – one that would expand Pier B’s rail footprint b as much as 100 acres from Pier B Street as far north as 12th street, which is just south of Anaheim Street, in Westside Long Beach.

There are two other considerations that will ultimately be presented to the Long Beach Board of Harbor Commissioners – one that takes the project to 10th street and another to 9th street. The other alternative would leave the facility as is. As identified in the draft EIR, the 12th Street project is the preferred option.

Thirty-six private parcels of land would have to be acquired by the port in order to move ahead with this project, assuming that it is approved by the harbor commission, according to the draft EIR. The document estimates that up to 36 businesses could be impacted, as Westside businesses often occupy more than one parcel.

According to Richard Cameron, managing director of planning and environmental affairs for the Port of Long Beach, the pier B on-dock rail expansion project is being pursued for both commercial and environmental reasons.

The project would enable the port to transfer more cargo to more trains directly from the terminal at Pier B, which in turn would reduce truck traffic that would otherwise have to handle that cargo. In doing so, the project would also reduce some traffic bottlenecks and boost throughput.

The preferred 12th street project would add 31 new yard tracks and five new arrival and departure tracks, according to the draft EIR. It would also add a track at the Dominguez Channel Bridge and four tracks at the Pico Avenue Corridor.

“The core of the project is to add switching and storage track capacity outside of the marine terminals,” Cameron said. The project will help the port compete with other facilities, like the Prince Rupert Port Authority in Canada, which receives a high percentage of discretionary cargo due to its efficient rail operations, he explained.

Some business owners in Westside Long Beach argue that it is not only the businesses in the direct path of the project that will be impacted and perhaps even forced to close, but also those in the immediate area.

On March 15, nearly a dozen business and property owners and executives gathered around a table with the Business Journal to discuss their concerns in a meeting at Superior Electrical Advertising, a long time Westside business located on property between Anaheim Street and 12th Street that would be just feet away from the proposed new rail tracks.

LAN Logistics, a family-owned business at 1520 W. 11th St., is directly in the path of the preferred Pier B rail expansion project. “My family has occupied that site for well over 20 years, several generations, including generational employees,” Kevin Donaldson, operations manager at LAN, told the Business journal. “The issue is the project would eliminate our facility.”

The nature of the firm’s work – moving goods and cargo for major companies like Siemens and entities that are “sensitive in nature” - - necessitates that it remain at the port, according to Donaldson. “We handle oversize and overweight loads which require us being very close to the port for safety measures, and it can’t really be done anywhere else,” he said.

John Donaldson, owner of LAN Logistics, indicated that his business is already being impacted. “Just the word of this project getting out to my customers is starting to really make them nervous, because we are in contracts with these people,” Donaldson said.

Owner of businesses located adjacent to the project, such as Superior Electrical and Phillips Steel co., are also concerned that their businesses and employees could be at risk.

Phillips Steel, which celebrated its centennial in 2015, has been moved twice by the city and port, although that was many years ago. It has occupied its current site at 1368 W. Anaheim Street since 1930, according to owner Daryl Phillips. The business occupies about 125,000 square feet.

“We have had some knock-down dragouts with the City of Long Beach and the port,” Phillips said. “We have always settled them equitably, and everything has worked out. The trouble with this project is…there is really no place for us to go.”

As reported by the Business Journal in February, the vacancy rate of industrial real estate in Long Beach is around 1%. In the entire south bay, it is even less than that.

“Where am I going to go find 120,000 square feet? It’s simply impossible,” Phillips said. “And if they are going to move me, if they are going to compensate me through eminent domain with a bunch of money, what am I supposed to do with it? There is nowhere to go. I lose my location. I lose my access to 75% of my customers that are within a 15 mile radius.”

While Phillips’ business is not in the direct path of the preferred project, it is close enough that traffic impacts could make it prohibitive to transfer materials on- and off-site.

Phillips asked if the port has determined whether the project would generate as much revenue as the tax revenue generated by the businesses that would have to relocate. The Business Journal put this question to Cameron, who said that a cost-benefit analysis has been conducted but not at that level. “We can’t put it in a CEQA document that way, but we definitely will be looking at that,” he said.

Stan Janocha, chief operating officer of Superior Electrical, noted that it might be difficult for him to find qualified employees with the future of his business in question. “If this ever passes and it’s publicized and its all over the place, we may have an issue of hiring qualified people,” he said. His colleague, Senior Vice President Doug Takeshi, noted that it could also make retaining employees difficult.

Takeshi added, “Similar to Daryl, we’re sitting on about 100,000 square feet of property. We need a certain percentage of property under roof, and [we need] open yard space. We need to have parking for over 100 vehicles. It would be very difficult to find something around the Long Beach area.”

The preferred project and both alternatives would eliminate ramps to the Shoemaker Bridge, which connects the Westside to Downtown Long Beach.

Vinec Passinissi, president of Marisa Foods and Santa Fe importers, a food manufacturing facility and restaurant/deli business in the Westside since 1947, is concerned that these traffic reconfigurations might hurt his business, which is locate a few blocks north of the proposed project.

“We have a tremendous amount of customers that come in to our restaurant from Downtown Long beach, from the port, from the refineries [and] Carson,” Passinissi said. “Our entire livelihood is dependent on access to downtown and to the port. And without that access with the changing infrastructure in this project, we could see huge decreases in our business.”

Cameron pointed out that a proposed project by the City of Long ebach and Caltrans as a part of the I-710 Corridor Improvement Project seeks to replace the Shoemaker Bridge altogether, which would also result in the closure of the ramps.

Multiple business owners said they were unaware of the project until recently. Sotiria Contos, whose family business, Golden Star Restaurants, has had a Westside Long Beach location since 1963, said that the port had “zero transparency” in the process.

According to the draft EIR, the port conducted public scoping meetings for the EIR process, required by the California Environmental Quality Act (CEQA), twice in September of 2009. E-Mail blasts were sent out to “the port’s database of subscribers” to advise of these meetings. The draft EIR also states, “E-mail updates have been sent to business and industry groups on an ongoing basis. Meetings with individual community groups have been conducted on an as-invited basis.”

Jim Sterk, CEO of Superior Electrical, recently spoke with other local businesses to see if they knew about the project. “I went door to door talking to some businesses, Spun products being one of them,” he said, referring to a business at 1800 W. 9th Street. That is in the direct path of the project. The business has been located in the Westside since the early 1970s.

“I met the general manager over there, and I told him what was happening. And I gave him a little brochure and all that stuff and he said, “I don’t know what youre talking about,” Sterk said.

Lee Wilson, whose family has owned the property LAN Logistics sits on for about 50 years, said property owners in the path of the project were first informed in August 2009 by mail, but he then heard little of the project until a notification last December about the release of the draft EIR. “If they could have slipped it under the rug any better, I don’t know how they would have,” he said. “They did not adequately notify the public.”

Eliciting chuckles, Contos quipped, “Meanwhile, City of Long Beach toots their horn that they’re planting trees and opening bike lanes.”

She added, “We’re about to make a train in our backyards that’s going to cause really grave environmental impacts on the Westside. Its almost as if they say  - Im not quoting them – but I feel like theyre saying ‘Well, it’s the westside. It comes up with the territory.’” A murmur of agreement rippled around the room. “Shame on them.”

Leaning over the table, she demanded, “write that down.”

On-Dock Rail and the Environment: for Better or for worse?

A public pamphlet distributed by the port indicates: “Each train eliminates as many as 750 truck trips, reducing traffic on roads, and trains are 75% more fuel efficient than trucks.” The pamphlet also states that on-dock rail facilities generate no truck trips, and thereby reduce roadway congestion and air emissions.

In an interview at the port’s interim headquarters, Cameron noted that Pacific Harbor Line – the short-haul rail that would be responsible for creating trains at the expanded facility – has “the cleanest short line fleet of locomotives in the world.” He also noted that the port is looking into opportunities to develop cleaner rail technologies.

The port projects growth in the coming years, which means increased traffic overall. But “the goal is to try to get as much overall truck trip reductions [as possible],” Cameron explained. “What we need to make sure is we keep up with that growth and not increase truck trips but stabilize or minimize to the best of our ability without hampering any type of economic [factors].”

In considering environmental benefits, Cameron said a number of factors must be looked at collectively. “You have noise reduction. You don’t have trucks going through neighborhoods that want to get to ICTF or down the I-710,” he said. “I would rather have a train versus trucks going through neighborhoods from a health risk perspective.”

However, Cameron qualified, “We are not making claims that this project is going to clean up the air. What it does do, it does help us overall with the emission reductions from one mode to another.”

The draft EIR states that the construction and future operation of the preferred 12th Street expansion of Pier Bs on dock rail would make a “cumulatively considerable and unavoidable contribution to a significant cumulative impact for emissions of six air pollutants,” including volatile organic compounds (VOC), carbon monoxide (CO), nitrogen oxide (NOX), particulate matter emissions (PM10 and PM 2.5) and possibly sulfur oxides (SOX).

Additionally, “With regard to odors, due to the large number of sources within and near the project site that emit diesel emissions, and the proximity of residents to industrial operations, odorous emissions in the project region are considered a significant cumulative impact.” However, due to the “mobile nature” of these odor sources, “the project would be likely to result in only minor changes in the overall odor environment in the vicinity.”

The draft EIR also states that the project would contribute to “individual cancer risk, population cancer burden and non-cancer effects from acute (short0term) exposure,” but that none of these risks would exceed acceptable thresholds after mitigation.

“I am not going to sit here and tell you it’s the cleanest,” Cameron said. “Over time, we would hope through efforts like our Clean Air Action Plan, working with our partners and the Class 1 [rail lines] that they will…continue to push for cleaner rail operations.”

Still, Cameron believes the cumulative effects of the project could have benefits.

“So if you start to think about the benefits of the project producing an overall two to three [additional] trains per day leaving the complex at a minimum, you’re looking at reducing 1,500 truck trips that otherwise were going to go out the gate,” he said.

All business and property owners interviewed by the Business Journal were concerned about the environmental impacts associated with the project.

“It will be the environmental issues of that location that will affect us gravely,” Phillips said, noting that his business backs up to 12th street. “The bad part is we employe 65 or so families – and when I say families, when you’ve been in business for 100 years, they are family,” he said. “We’re subjecting them to environmental issues that we have no control over that no one is taking any responsibility for.”

Phillips added, “I want it on the record that I am not opposed for a minute to redevelopment or development as long as its done properly. And this is a project that is not well though out for the better of the community, the Westside, the City of Long Beach [or] the County of Los Angeles.”

Passinissi had similar concerns. “We have numerous employees that live in the area and come to work every day that are worried about environmental issues that are going to affect their health,” he said.

Contos, too, was worried about her business’s employees. “Our employees are like our family, and I stand behind them and I protect them. If I don’t have them, I don’t have a business,” she said. Most of her employees live within a mile of the restaurant, she noted. “I don’t want my employees walking to work compromising their health. It’s wrong.”

Many of Golden Star’s regular customers are truck drivers. “The truck drivers were told a few years back that they must make changes accordingly to their trucks such that the trucks run green. All truck drivers complied,” she said. “Those truck drivers that they are saying they are going to take off the 710 freeway were told to do something, and they did it.”
What Now?

The comment period for the draft EIR has closed. Several of the business and property owners who spoke with the Business Journal indicated they have met with port staff individually but not as a group. Some have met with their councilmember, Lena Gonzalez, who also represents the port. Additionally, most submitted comments on the draft EIR, and a few submitted letters from legal representation.

Asked for comment, Gonzalez wrote in an e-mailed statement: “I have personally met with our harbor department as well as the business community regarding Pier B. There are many issues to consider, especially as local West Side businesses will be greatly impacted. I look forward to hearing more as the process continues.”

“They said, ‘We will listen.’ And they have. They listened,” John Donaldson said. “Then they say, you know, ‘Submit your complaints in writing.’ We have. I don’t know what they’re thinking.”

Port staff is currently going through comments submitted on the draft EIR, according to Cameron. “We extended the comment period 30 days and had another public hearing because we found out that not all the stakeholders were getting the notifications,” he said.

“We would sit down and will continue to meet with business owners and property owners and all stakeholders,” Cameron said. “In fact, we are probably going to want to at some elvel have a variety of different meetings with these commenters.”

Once comments have been addressed, the port will determine if its needs to reissue the draft EIR or portions of it and what the ensuing timeline will be, according to Cameron. “Probably within the next three to four weeks, we will have a better sense of a new timeline. We do not want to rush this. We believe this is a good project,” he said.

Cameron said that acquiring properties vie eminent domain is “the last approact we want to take.” He explained, “The last thing we want to do is displace, but that’s kind of where we are right now with figuring out how to move forward with the project in a way that minimizes those types of impacts.”

While port staff currently working to determine which businesses will be impacted and how to develop a means to mitigate or reduce those impacts, he noted that its “a little bit of the chicken before the egg” to make determinations before the harbor commission votes on the project or one of its alternatives.

“So what our focal point is right now is, did we do CEQA right?” Cameron explained. “A lot of what we are sifting through right now…are comments with people not being happy about losing access, people not being happy about losing their businesses. And we respect that. And so that’s what we’re kind of going through right now.”

Meanwhile, the businesses of the Westside are busy gathering signatures opposing the project, according to Paul Collins, architect and owner of PAC designs on the Westside.

“we sent out a petition. We put it out one week ago, and we’ve collected 1,000 names,” Collins said. “we suspect with the neighborhoods…that we will have between 15,000 and 20,000 signatures very soon. We’re going to continue collecting signatures. The neighborhoods are really upset. They don’t know anything about it at all.”

Collins said in the end, he just wants the port to remain true to the tents of its Green Port Policy – a series of programs aimed at reducing environmental impacts of tis operations.

“we have 135 employees. Forty-one of those employees are Long beach residents, and we hire Long Beach residents,” Janocha said. “If we had two equal people [apply] and one was from Long Beach, they would get the job. We are very loyal to the City of Long Beach. One of my biggest concerns is, how loyal is the city to Westside businesses? How loyal are they to us?”

Print Edition

In Westside Long Beach, the tune of a dance that has been danced many times before is starting to crescendo. It’s a ditty both sides know by heart  - a delicate dialogue between the needs of the longtime businesses in the area and those of the port.

Apr 10, 2017

An aggressive bid to better compete in e-commerce

Online Edition

Dis­senters were quick to re­act when ModCloth, an on­line seller of trendy women’s clothes and ac­ces­sories, was ac­quired by re­tail gi­ant Wal-Mart Stores Inc. last month.

“You have disappointed us all,” one reader com­mented un­der a blog post by ModCloth co-founder Susan Gregg Koger an­nounc­ing the sale — the no­tion be­ing that ModCloth would lose its cache as part of a dis­count mass mer­chant. “I’m done shop­ping with you,” wrote an­other.

But Gregg Koger noted that Wal-Mart would give ModCloth “the nec­es­sary re­sources and sup­port that we need as a busi­ness to grow.”

ModCloth is one ex­am­ple of how Wal-Mart is be­lat­edly but ag­gres­sively ex­pand­ing its e-com­merce busi­ness to keep pace with the seis­mic shift in con­sumer shop­ping from bricks-and-mor­tar stores to the In­ter­net.

ModCloth is one ex­am­ple of how Wal-Mart is be­lat­edly but ag­gres­sively ex­pand­ing its e-com­merce busi­ness to keep pace with the seis­mic shift in con­sumer shop­ping from bricks-and-mor­tar stores to the In­ter­net.

With nearly half-a-tril­lion dol­lars in an­nual sales and 4,700 U.S. stores, Wal-Mart has been buy­ing on­line re­tail­ers, slash­ing ship­ping rates and rolling out new ways for in-store cus­tomers to do more of their shop­ping at Wal­mart.com and its other web­sites.

With nearly half-a-tril­lion dol­lars in an­nual sales and 4,700 U.S. stores, Wal-Mart has been buy­ing on­line re­tail­ers, slash­ing ship­ping rates and rolling out new ways for in-store cus­tomers to do more of their shop­ping at Wal­mart.com and its other web­sites.

With nearly half-a-tril­lion dol­lars in an­nual sales and 4,700 U.S. stores, Wal-Mart has been buy­ing on­line re­tail­ers, slash­ing ship­ping rates and rolling out new ways for in-store cus­tomers to do more of their shop­ping at Wal­mart.com and its other web­sites.

While tra­di­tional U.S. in-store re­tail­ing is grow­ing less than 2% a year, forc­ing many re­tail­ers to close stores, e-com­merce is grow­ing 16% an­nu­ally, the re­search firm EMar­keter Inc. re­ports. E-com­merce sales this year will hit $462 bil­lion and soar to $789 bil­lion by 2021, the firm es­ti­mates.

While tra­di­tional U.S. in-store re­tail­ing is grow­ing less than 2% a year, forc­ing many re­tail­ers to close stores, e-com­merce is grow­ing 16% an­nu­ally, the re­search firm EMar­keter Inc. re­ports. E-com­merce sales this year will hit $462 bil­lion and soar to $789 bil­lion by 2021, the firm es­ti­mates.

While tra­di­tional U.S. in-store re­tail­ing is grow­ing less than 2% a year, forc­ing many re­tail­ers to close stores, e-com­merce is grow­ing 16% an­nu­ally, the re­search firm EMar­keter Inc. re­ports. E-com­merce sales this year will hit $462 bil­lion and soar to $789 bil­lion by 2021, the firm es­ti­mates.

While tra­di­tional U.S. in-store re­tail­ing is grow­ing less than 2% a year, forc­ing many re­tail­ers to close stores, e-com­merce is grow­ing 16% an­nu­ally, the re­search firm EMar­keter Inc. re­ports. E-com­merce sales this year will hit $462 bil­lion and soar to $789 bil­lion by 2021, the firm es­ti­mates.

Wal-Mart’s ef­fort to tap that on­line growth of­ten is por­trayed as a di­rect at­tack on Ama­zon.com Inc., the on­line-re­tail­ing be­he­moth.

Wal-Mart prefers to frame its strat­egy as cap­tur­ing more of the e-com­merce mar­ket by blend­ing its in-store, on­line and mo­bile-app of­fer­ings so that cus­tomers can eas­ily move from one to the other to make pur­chases. If it snatches busi­ness from Ama­zon in the process, all the bet­ter.

One of Wal-Mart’s key ac­qui­si­tions was Jet.com Inc., which also sells a wide va­ri­ety of con­sumer prod­ucts and gro­ceries. Wal-Mart paid $3.3 bil­lion for Jet.com last year and then named Jet.com Chair­man Marc Lore to head its en­tire U.S. e-com­merce op­er­a­tion.

“It was a rad­i­cal sig­nal to ev­ery­one that the big­gest re­tailer in the world was will­ing to put $3.3 bil­lion into the [on­line] mar­ket,” said Adrien Nussen­baum, chief ex­ec­u­tive of Mi­rakl, a de­vel­oper of soft­ware prod­ucts for re­tail­ers and other firms.

Un­der Lore and Wal-Mart Chief Ex­ec­u­tive Doug McMil­lon, Wal­Mart has taken sev­eral other steps to bol­ster its e-com­merce sales, in­clud­ing:

Un­der Lore and Wal-Mart Chief Ex­ec­u­tive Doug McMil­lon, Wal­Mart has taken sev­eral other steps to bol­ster its e-com­merce sales, in­clud­ing:

Ac­quir­ing Shoe­buy.com, an on­line footwear re­tailer, and Moose­jaw.com, an on­line seller of out­door ap­parel and gear. Those re­tail­ers and ModCloth con­tinue op­er­at­ing as sep­a­rate web­sites.

Launch­ing free two-day ship­ping for orders of $35 or more at Wal­mart.com, Jet.com and many of its other sites.

Boost­ing the stock on its vir­tual shelves. At the start of 2016, Wal­mart.com had 8 mil­lion items for sale; to­day it has more than 35 mil­lion items.

Launch­ing a pro­gram that al­lows in-store cus­tomers to go on­line or check their phone app to see a list of items they have bought, then re­order those items on­line.

Rolling out a gro­ceries pro­gram whereby cus­tomers or­der items on­line and then have the gro­ceries loaded into their ve­hi­cle at a Wal-Mart store.

Form­ing a di­vi­sion called Store No. 8 that’s in­tended to hatch new on­line re­tail ap­proaches and busi­nesses.

Form­ing a di­vi­sion called Store No. 8 that’s in­tended to hatch new on­line re­tail ap­proaches and busi­nesses.

Wal-Mart said in Oc­to­ber that it was go­ing to slow the pace of new store open­ings this year, in good part to shift in­vest­ments to its ecom­merce busi­ness.

“We’re be­ing pretty ac­tive,” Lore said dur­ing a re­cent tech gath­er­ing, called Code Com­merce, in Las Ve­gas.

“We’re be­hind. We need to catch up. There are some big things we have in the works,” said Lore, who spent two years with Ama­zon af­ter it bought his pre­vi­ous on­line ven­ture, the par­ent of Di­a­pers.com and other sites.

Wal-Mart is the sec­ond-largest on­line mass mer­chan­diser be­hind Ama­zon, but it’s a dis­tant sec­ond. Ama­zon’s prod­uct sales to­taled $94.7 bil­lion last year while Wal­Mart’s tal­lied $14.4 bil­lion, ac­cord­ing to EMar­keter.

Ama­zon, with $136 bil­lion in to­tal sales last year, has other as­sets and ser­vices as well, namely a va­ri­ety of video, en­ter­tain­ment and other ser­vices avail­able through its Prime mem­ber­ship.

Prime also pro­vides free ship­ping on Ama­zon pur­chases, and an­a­lysts es­ti­mate about 65 mil­lion Ama­zon cus­tomers sub­scribe to Prime for $99 a year. (Ama­zon doesn’t dis­close the num­ber ex­cept to say it has “tens of mil­lions” of sub­scribers.)

Prime also pro­vides free ship­ping on Ama­zon pur­chases, and an­a­lysts es­ti­mate about 65 mil­lion Ama­zon cus­tomers sub­scribe to Prime for $99 a year. (Ama­zon doesn’t dis­close the num­ber ex­cept to say it has “tens of mil­lions” of sub­scribers.)

Stephen Beck, founder of the man­age­ment con­sult­ing firm Cg42, said Prime gives Ama­zon cus­tomers more in­cen­tive to shop at the site. Prime cus­tomers spend an av­er­age of $270 a year above what they were spend­ing at Ama­zon be­fore sub­scrib­ing, he said.

“One of the things Ama­zon does re­ally well is to high­light the value of the Prime sub­scrip­tion,” Beck said. “Wal-Mart is a re­tailer and proudly so, but Ama­zon is more than that.”

Ama­zon spokes­woman Sally Fouts would not com­ment about Wal-Mart’s spe­cific on­line ven­tures, but she said, “We’ve had com­pe­ti­tion ev­ery day of our ex­is­tence at Ama­zon, and it’s never changed our ap­proach.

“We ob­sess over cus­tomers and the things we be­lieve cus­tomers will al­ways care about — low prices, vast se­lec­tion and fast de­liv­ery.”

“We ob­sess over cus­tomers and the things we be­lieve cus­tomers will al­ways care about — low prices, vast se­lec­tion and fast de­liv­ery.”

Ama­zon’s ef­forts ex­tend to a gro­cery de­liv­ery ser­vice in cer­tain ar­eas, in­clud­ing Los An­ge­les, called Ama­zon Fresh. It’s also be­gun testing its own gro­cery pickup ser­vice in Seat­tle, where Ama­zon is head­quar­tered.

Al­though Wal-Mart is well be­hind Ama­zon in e-com­merce, Wal­Mart has the scale and re­sources to make a much big­ger splash in on­line shop­ping.

The Ben­tonville, Ark., com­pany, which also owns the Sam’s Club chain, posted to­tal sales of $482 bil­lion in its fis­cal year that ended Jan. 31. The com­pany says its 4,700 U.S. stores are lo­cated within five miles of 70% of the U.S. pop­u­la­tion, and it has an enor­mous dis­tri­bu­tion network in place. More than 140 mil­lion peo­ple shop at its stores and Wal­mart.com in the U.S. ev­ery week.

The Ben­tonville, Ark., com­pany, which also owns the Sam’s Club chain, posted to­tal sales of $482 bil­lion in its fis­cal year that ended Jan. 31. The com­pany says its 4,700 U.S. stores are lo­cated within five miles of 70% of the U.S. pop­u­la­tion, and it has an enor­mous dis­tri­bu­tion network in place. More than 140 mil­lion peo­ple shop at its stores and Wal­mart.com in the U.S. ev­ery week.

Wal-Mart doesn’t break out dol­lar sales for its U.S. e-com­merce group. But the com­pany be­gan re­port­ing year-over-year per­cent­age changes in the group’s sales with the fourth quar­ter that ended Jan. 31, and in that quar­ter sales jumped 29% from a year ear­lier. The gain in­cluded re­sults from Jet.com, which Wal-Mart bought last Septem­ber.

In the gro­ceries sec­tor, “the [on­line] bat­tle for supremacy is still un­de­cided” so it makes sense for Wal-Mart to be ag­gres­sive be­cause it’s “an area where Ama­zon has not dom­i­nated,” EMar­keter an­a­lyst Yo­ram Wurmser said.

In the gro­ceries sec­tor, “the [on­line] bat­tle for supremacy is still un­de­cided” so it makes sense for Wal-Mart to be ag­gres­sive be­cause it’s “an area where Ama­zon has not dom­i­nated,” EMar­keter an­a­lyst Yo­ram Wurmser said.

Even if Wal-Mart never catches Ama­zon over­all, “I think they can live very well along­side Ama­zon be­cause they have so many stores, ac­cess to so many prod­ucts and great lo­gis­tics” for mov­ing goods to con­sumers while keep­ing prices low, Nussen­baum said.

When asked about com­pet­ing with Ama­zon’s Prime mem­ber­ship, Lore told the con­fer­ence that “we’re of­fer­ing two-day free de­liv­ery [with a $35 min­i­mum] on 2 mil­lion prod­ucts. We think that’s a re­ally com­pelling-value propo­si­tion, given the prices we’re of­fer­ing, and we feel like we’re well­po­si­tioned to tar­get that mass cus­tomer.”

Wal-Mart is eye­ing the broader goal of mak­ing it easy for cus­tomers to shift from shop­ping in its stores to shop­ping on­line or with their smart­phones.

“We be­lieve the fu­ture of com­merce is a blend of stores, on­line and mo­bile seam­lessly com­ing to­gether, al­low­ing cus­tomers to shop how, when and where they want,” Wal-Mart spokesman Ravi Jari­wala said.

“We be­lieve the fu­ture of com­merce is a blend of stores, on­line and mo­bile seam­lessly com­ing to­gether, al­low­ing cus­tomers to shop how, when and where they want,” Wal-Mart spokesman Ravi Jari­wala said.

As for those ModCloth cus­tomers who grum­bled that the op­er­a­tion is now owned by Wal-Mart, Lore had this re­sponse:

“If we were go­ing, to­mor­row, to take the prod­ucts of ModCloth and put them on Wal-Mart and dis­con­tinue in­vest­ments in them as an in­de­pen­dent brand, ab­so­lutely I get it, I’d be com­plain­ing too,” he said.

“We’re not do­ing that. We’re keep­ing them as a fully in­de­pen­dent sub­sidiary, and we’re go­ing to in­vest ag­gres­sively in the busi­ness, and the busi­ness and the cus­tomer are go­ing to be bet­ter off.”

 

 

Online Edition

Dis­senters were quick to re­act when ModCloth, an on­line seller of trendy women’s clothes and ac­ces­sories, was ac­quired by re­tail gi­ant Wal-Mart Stores Inc. last month.

“You have disappointed us all,” one reader com­mented un­der a blog post by ModCloth co-founder Susan Gregg Koger an­nounc­ing the sale — the no­tion be­ing that ModCloth would lose its cache as part of a dis­count mass mer­chant. “I’m done shop­ping with you,” wrote an­other.