Port mergers: Why not Los Angeles and Long Beach?

Abstract

There have been significant attempts to merge the San Pedro Bay Ports of Los Angeles and Long Beach since their creation as separate municipal authorities in 1911. These efforts continue to the present day with the most recent proposal made in 2014. Yet all efforts to merge the two largest container ports in North America have failed. A review of attempts to promote or force the merger of the two ports was undertaken to identify the motivating factors behind the merger proposals, how the merger concepts were initiated and why they failed. Those who proposed merging the ports were typically business groups, port users or elected officials but not port administrators. Merger proposals were often motivated by the desire to eliminate what merger proponents viewed as destructive competition, duplication of facilities, or because one port coveted the resources of the other.Yet, all merger proposals have failed to gain widespread support for two primary reasons. First, all proposals came from outside the port administration, often generated without any port knowledge or participation and limited stakeholder involvement. Second, none of the merger proposals were accompanied by an objective analysis identifying the benefits to accrue to both port cities from a merger. Although attempts to merge the two ports failed, cooperative efforts between the ports increased in the 1980's, spurred by problems confronting both port administrations, that is, the impacts of containerization on the surrounding communities. The ports used a variety of governance tools to affect cooperative arrangements including creation of quasi-independent single purpose authorities. Initial efforts focused on improving hinterland infrastructure. The increased use of “discussion agreements” approved by the Federal Maritime Administration allowed the ports to expand cooperative efforts to environmental and logistics matters. The willingness and initiatives of the ports to cooperate, when necessary, has negated serious consideration of merger proposals. Instead, the two ports have increasingly expanded cooperative efforts to address common issues while retaining their independent jurisdictions.