Q&A: Port of Oakland Maritime Director Bryan Brandes

LM Group News Editor Jeff Berman recently caught up with Port of Oakland Maritime Director Bryan Brandes. Brandes addressed various topics, including Peak Season, volumes, and vessel alliances, among others. Their conversation follows below. 

LM: The import volumes and volumes in general, especially at the West Coast ports, are in a very healthy place. How do you sort of view what's going on volume wise when we look at specifically at imports and exports, in terms of what the data is saying?

Brandes: Your observation is correct. It is impacting all the West Coast ports, starting with POLA and POLB in a slightly stronger market than Oakland and then moving north. The SoCal ports are increasing volume at a higher rate. And that's really due to the economy being generally strong and inventories have been slowly being depleted. So, this is really a restocking of inventory levels in warehouses, which have been at record highs for the last couple of years. Warehouses were overflowing to where most BCOs had to take out additional warehouse capacity just for pure storage. Those additional warehouses are now being removed from the systems, and it's really returning back to a normal replenishment [in the sense of kind of a pre-pandemic setting]. I anticipate we'd that we're still going to see this as general replenishment; this is not yet in anticipation of back to school. I still think we'll see a stronger market uptick over the summer.

LM: In an interview with Port of Oakland Executive Director Danny Wan, he talked about how the Port of Oakland is focused on reducing diesel emissions 86% from 2005 levels. How is that initiative going?

Brandes: That's still a very, very prominent initiative, and we have been steadily progressing towards further reducing that tail. That first improvement was significant, that's a big percentage. But the tail is much more difficult and much more costly. How we're doing that is working with all of our all our tenants and all the stakeholders that utilize the port and helping them transition equipment and their fuel source to zero emission technology. And we're working in parallel tracks with battery electric operated vehicles, as well as hydrogen vehicles. We currently have 40 hydrogen-powered over the road trucks in the port, and there was a hydrogen fueling station. That's not on port property but port-adjacent at the East Bay mud facility. Even in 2022 when you spoke to Danny, we already had some battery electric charging stations. We're adding more battery electric charging stations for over the road trucks. And then we're working with our terminal operators to determine the technology they want to use, whether it's battery electric, or hydrogen, and working with the available grants to help them get grants to purchase the equipment and build out the infrastructure to accommodate battery, electric, or hydrogen at the terminals

LM: What is the current state of the port’s rail-focused initiatives?

Brandes: We do not have on-dock rail, we have near-dock rail. We have the BN facility and the UP facility literally across the street from our terminals. It requires a container to be trucked across the street into the railroad facilities. The transition to on-dock rail has been something we have included, for years, in a land use analysis that we are performing this year and will complete this year. It is yet to be decided if we are going to proceed with on-dock rail. There are clearly advantages for on-dock rail, but it is also very expensive. But we would really only benefit from it if we receive first port of call visits. If Oakland is going to remain primarily a second port of call, then off-dock rail is completely suitable because you need the density from all three terminals to make a train for certain destinations. So, it's actually advantageous to be off dock. We're doing a market assessment now and talking to all the ocean carriers and the terminal operators to see if this is the direction we want to go. And we should have a direction and decision later this year.

LM: Let’s shift gears to the ocean carriers and the various vessel alliances. As a port, how do you view these alliances and what is the impact of them on port throughout, in terms volumes, for example?

Brandes: I think the main purpose of an alliance is really is to provide be able to provide a broader scope of products to the customer at a better price, and I really think it does achieve that. I think alliances are needed until you get to the scale of where MSC is now. You want to be able to provide a timely weekly service to all the destinations that your customers demand. In general, I am a strong supporter of alliances. They have been around for a long time, and I think the issues they had have been worked through to where they are pretty favorable for customers.

In terms of how an alliance impacts a port authority, alliances want to continue to call on the same terminal. That makes sense regardless of the owner of the hull of the ship. It makes sense because the equipment is there. If a container comes in and needs to roll from one ship to another, it doesn’t have to leave the terminal. There are a lot of benefits for all alliance vessels calling on the same terminal. From a port authority view, as alliances change, we just need to ensure that they line up with the terminal assets that we have and that we are not trying to put 90% of the assets through 50% of the terminal. With the way the new alliances have developed, we believe that works out very well for the Port of Oakland.  

LM: How do you view port labor, in regards to last year’s prolonged West Coast port labor negotiations, and the East Coast port labor negotiations between the ILA and USMX, with their deal set to expire at the end of September? Have you seen any signs of volume shifts to the West Coast, or is it too early for that?

Brandes: It really depends on the shipper. Most larger shippers have a network of distribution centers to where they can shift volume around to their DCs throughout the country. It would be easy within their network to ship more volume to the West Coast and run it through their DCs, and then move it in domestic containers versus coming in from the East Coast. And then there's others that will just use transportation directly to where discharge on the West Coast and rail all the way to the East Coast. So, in short, yes, there will be some shippers that do it. They just can't afford to have inventory tied up sitting on the dock or caught up in a labor dispute, especially after the last few years. But it's too early. The contract is not up until later on this year. My opinion is we will start to see some shifts, but I don't think we'll see that until July and August through later on in the year.

LM: How are you approaching Peak Season? Will it be more normal this year, as opposed to the last few certainly, going back to 2020?

Brandes: It's in line with the way the volumes are tracking where the inventory levels in warehouses are. Clearly, nothing was normal during the pandemic. There was a lot of abnormal purchasing on things like new appliances and furniture and other big items. A lot of those items that were in demand took up a lot of space in containers. This year, I don’t think we are going to see a huge spike for stuff like that. I think we will be seeing a traditional spike over the summer but it won’t be like it was with people moving or doing home projects. There will be more of a normal uptick for back to school and also for the holiday season.