CSCMP's Supply Chain Quarterly
Global
February 25, 2020
Forward Thinking

Port of Los Angeles forges cooperation agreement with Indonesia

Comment
Partners will share data, plan infrastructure development in pushback against uncertainty of tariff changes and USMCA treaty.

The Port of Los Angeles said yesterday it has launched a partnership with Indonesia to collaborate on data sharing and infrastructure development, forging its own path with an international freight initiative in an era when government trade wars have kept many cargo ports guessing about changes to trading partners and cargo flow.

Officials from the Port of Los Angeles and Indonesia Port Corp. (IPC) signed the memorandum of understanding (MOU) with goals to promote cooperation on issues of business and trade, digital supply chain efficiency, the environment, and infrastructure development. Those moves could be significant because Indonesia is the largest economy in Southeast Asia and the 16th largest economy in the world, the port said.

The move comes as the Trump Administration has issued a succession of fast-changing tariffs in recent months that have changed traditional patterns of global imports and exports. Port of Los Angeles Executive Director Gene Seroka has been a vocal critic of those tariffs, saying they threaten nearly 1.5 million U.S. jobs and more than $186 billion of economic activity nationwide.

Additional changes are in the works as the Administration works to replace the 1994-era North American Free Trade Agreement (NAFTA) with a new United States-Mexico-Canada Agreement (USMCA).

Under the new deal with Indonesia, the Port of Los Angeles will collaborate with Indonesia's state-owned port system—known formally as PT Pelabuhan Indonesia II (Persero)—on strategies related to port operations, commercial trade competitiveness, and port and rail infrastructure development. In addition, the partners will share best practices on pollution reduction, alternative energy initiatives, and port security and safety programs. 

Finally, they will also cooperate on digital supply chain efficiency, following the Port of Los Angeles' lead on using the "Port Optimizer" platform, a digital portal co-developed with GE Transportation to track real-time maritime shipping data for cargo owners and supply chain stakeholders.

"Increased global competitiveness, supply chain innovation and the more widespread use of sustainable operations technology can only happen if ports join forces in earnest to share ideas and expertise," Seroka said in a release. "This agreement today is another example of the Port of Los Angeles' commitment to further promote international cooperation and collaboration across the globe." 

The deal with Indonesia follows other recent contracts between individual ports and foreign countries, including the Port of Los Angeles signing a five-year MOU last month with Denmark's Copenhagen Malmö Port AB (CMP) to collaborate on sustainability and environmental issues.

Other initiatives include a deal in November between a consortium of Florida seaports and Mexico to enhance international trade, and the announcement in June that Atlanta's Hartsfield-Jackson International would collaborate with Amsterdam's Airport Schiphol to support cargo trade and investment between metro Atlanta and the Netherlands.

 

Ben Ames is Editor at Large and a Senior Editor at Supply Chain Quarterly’s sister publication, DC Velocity.

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