Process improvements needed at L.A. port, audit finds

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Los Angeles Mayor Antonio Villaraigosa and City Controller Wendy Greuel on Wednesday, July 13, announced findings from the city’s latest audit – an industrial, economic and administrative review of the Los Angeles Harbor Department that finds that the Port of Los Angeles continues to be a leading economic driver and gateway for container cargo entering America. It also shows that the port would benefit from process improvements to increase transparency and ensure continued competitiveness.

“The Port of Los Angeles is an economic engine, not only for the city but for the nation as a whole, and it is imperative that we manage it efficiently and effectively,” Villaraigosa says. “The survey clearly shows that the port is working diligently to stay on the cutting-edge of new technology while taking the steps necessary to ensure we remain competitive during the leadup to the expansion of the Panama Canal and the increased competition that will accompany that.”

Villaraigosa and Greuel both say they are optimistic about the future of the Los Angeles shipping industry and praised plans already put in motion by the San Pedro Bay Ports in the latter stages of 2010 to address issues of competitiveness and improve customer service. But despite the strong picture the report painted of the harbor, Greuel acknowledges that the upcoming years will bring with them new competitive challenges.

“In 2014, the expanded Panama Canal will open for public use,” Greuel says. “This new avenue for Pacific shipping challenges the status of the Los Angeles ports as the premier destination for Pacific cargo coming into America, so we need to increase transparency and make the Port of Los Angeles as competitive and accessible as possible.”

The audit revealed that the port needs to improve internal processes to ensure that harbor development projects are defined clearly to provide transparency in budgeting and scheduling. Project costs totaled more than $116 million compared to initial work orders of just less than $20 million due to changing project scopes and requirements.

“The port has done much to clean up the air, reduce traffic congestion and complete the San Pedro Waterfront project,” Greuel says. “However, the port could do more with greater transparency and process improvements.” Villaraigosa and Greuel called on the department to immediately revisit its policies on change orders and project management to minimize costs and delays in the future.