Port of Los Angeles receives $1.17bn in fiscal 2016/17 budget
Los Angeles Board of Harbor Commissioners, the management and operational authority of the Port of Los Angeles, has allocated an annual budget of $1.17bn for the fiscal year (FY) of 2016/17 to the port.
The new budget will support four major objectives of the port's 2012-2017 strategic plan, which includes development of infrastructure for promoting growth; implementation of an efficient, secure and environmentally sustainable supply chain; enhanced financial performance of port assets; and reinforcement of relationships with port stakeholders.
The 2016/17 budget includes $452.8m in operating receipts, a primary mechanism for funding day-to-day port operations, representing a 5.7% increase over the previous year's budget, mainly due to expected growth in cargo volumes and related shipping service revenues.
At the Port of Los Angeles, cargo volumes were witnessing an upward trend since service levels returned to normal during the first half of last year.
The port authority has noted that implementation of a chassis pool programme by the port's three major chassis providers, a 'Peel-Off' programme, and continued supply chain optimisation efforts are also offering positive results in terms of cargo velocity.
The trend is also expected to continue in the 2016/17 fiscal, with cargo volumes anticipated to increase by 1.9% over the previous year budget to around 8.5 million twenty-foot equivalent units (TEUs) per year.
Port of Los Angeles executive director Gene Seroka said: "We've worked extremely hard to optimise the supply chain at both the national and international levels.
"While this work needs to continue, our supply chain initiatives have started to show early results."
As various capital improvement programmes are ending up in 2015/16 fiscal, the port's newly approved $146.1m capital improvement plan (CIP) expects to register a 24% decrease relative to the previous year budget.
The finished CIP projects in FY 2015/16 include the TraPac Intermodal Container Transfer Facility, TraPac terminal buildings and main gate, John S Gibson Intersection / Northbound Interstate-110 ramp access improvements, and Interstate-110 / State Route 47 connector upgrades.
Major terminal projects approved to continue in the new FY 2016/17 budget include TraPac backland improvements, Yusen Terminals, berth redevelopment, electrical infrastructure at the World Cruise Center, wharf rehabilitation at the WWL Vehicle Services terminal, as well as wharf improvements at the Port's liquid bulk terminals.
Operating expenses of $249m has been earmarked in the FY 2016/17 budget, recording a 3.6% increase over the previous year.
Salaries and benefit allocations to the construction and maintenance division of the port, as well as to the port police, are expected to cover over 40% of gross salaries and benefits approved in the FY 2016/17 budget.
The newly approved budget will allow the port to meet various financial metrics, such as maintaining its AA debt rating, surpassing a 2.0 times debt service coverage, generating at least a 45% operating margin as well as preserving a level of cash reserves that is constant with an AA-rated port.
Around 3,940 jobs within the North American region will be created with the support of the new budget.
Last year, the port facilitated $270bn in trade and helped create more than 133,000 jobs in the City of Los Angeles, US and 479,000 jobs in the Southern California region, US.