In this episode of the Future Of, there are three port leaders talking with our host Jeff Dance about the future of Ports.

Jeff Dance: Welcome to The Future Of, a podcast by Fresh Consulting, where we discuss and learn about the future of different industries, markets, and technology verticals. Together, we’ll chat with leaders and experts in the field and discuss how we can shape the future human experience. I’m your host, Jeff Dance. In this episode of The Future Of, we’re joined by three port leaders in a special two-part series to explore the future of Ports. In this first episode, we’re focusing on the port innovation. And I’d like to introduce briefly our first guest, Paul Matthews, who’s the CEO of the Port of South Louisiana. The Port of South Louisiana was founded in 1960 and is the second largest Port in the Western Hemisphere and the number one grain exporter and the number two energy transfer port. In 2022 alone, the Port of South Louisiana handled over 238 million tons, over 129 million domestic transshipments, and 66 million exports. Just to break that down, that’s 353,000 transshipments per day, 180,000 exports per day, and 652,000 tons per day. They also employ over 10,000 workers. Paul, who’s here with us, holds an MBA and a Bachelor’s in Political Science. He’s the first Black port CEO and the youngest Port Director in the history of Louisiana. Welcome, Paul.

Paul: Thanks for having me. I appreciate it.

Jeff: For those who don’t know you, could you just share a bit more about your experience and kind of your journey into the port industry overall?

Paul’s background

Paul:  My journey started at the Port of New Orleans over 10 years ago. And I was mentored by the CEO there, Gary Lagrange, and really got a chance to learn about all the different intricacies of port activity and understand the significance, its history, the economics of Ports. I was able to work with people from all across the world and understand how navigation, shipments, transportation, logistics really brings us together and keeps the economy going and allows for us to foster economic development. So I served there for over five years, had an opportunity to move on to the Port of Clackamas, which represents the first 80 miles of the Mississippi River, and served as the deputy port director. And at that spot, we were able to bring in a major LNG facility, which now it’s going to move over 40 million tons of LNG exporting out to Eastern Europe, which I believe we all can appreciate the need for energy independence in Europe and how Louisiana is really at the forefront of doing that. We have much of these geopolitical issues with Russia and Ukraine going on right now.

So two years ago, I interviewed and I got the call to become the CEO of the Port of South Louisiana. And being at three ports on the lower Mississippi River. It’s pretty unique. They’re all different ports. If you’ve been to one port, you’ve only been to one port. But I’ve been a mainstay on the Mississippi River. And understanding the importance of the busiest port complex in the world, when you take all five ports, you look at their activities. So from Baton Rouge, Port of South Louisiana, Port of New Orleans, Port of St. Bernard, and Port of Clackamas, it’s over 200 miles of navigation on the Mississippi River. And if you include both sides of the river, you’re talking about over 400 miles for docks and ships to come in and call. With six traverses up the river, 6,000 traverses down the river, where you have over 12,000 trips each year at the Port. More than a half a billion tons of cargo on the busiest port complex in the world represented those five ports. So I’m thankful and blessed to have served in three different ports on the lower Mississippi River. And that’s helped me out in my experience in understanding what is needed on the lower Mississippi River and the importance of us. And that’s exporting much of the grain, 60% of the nation’s grain to the rest of the world and 20% of the petrochemical products to the rest of the world. So we as the Port of South Louisiana feed the world, but we also fuel the world.

PortofSL’s recent rebrand

Jeff : Before we dive in, thanks for that background. Your tie looks unique. Tell us more about your tie that you’re wearing.

Paul: So my tie is actually a representation of our new brand at the Port of South Louisiana. We rebranded earlier this year. We wanted to try something new. So we have this now brand of a shield, which has four coordinates, which represents the four modes of transportation at the Port of South Louisiana. Road, rail, water. And then we have a blue sky that represents air for our airport. So we’re one of only two ports in the state of Louisiana that operates an airport. So it’s a little festive. We have them in different colors. I’m trying this tie on for the first time today.

Today’s challenges

Jeff : Amazing. It’s fresh, it’s very fresh. Well, let’s talk about the current landscape and then the future along with some of the opportunities and challenges. You know, I think we, as an everyday American or person in the world, we all realize we’re connected to the ports through the pandemic because of the global supply chain. Things were hard to get, took a long time to get, businesses and consumers alike. Congestion is one of the challenges we hear about. We often hear about more sustainable solutions. You know, there’s all of these coordination, routing, data, lots happening, as you mentioned, just by the stats that we discussed. As the second largest port in the Western Hemisphere, if you were to name some of the challenges that are most critical today, what would you say?

Paul : Well, navigation is always critical and relieving congestion in all modes of transportation. So we’re very grateful that the state and Army Corps of Engineers actually were able to work together to deepen the channel, the navigational channel of the Mississippi River to 50 feet. That has been a tremendous impact since they’ve started early in the river. So what we know today is that if you were able to dredge additional foot, the Mississippi River. For every foot it’s going to be additional million dollars per foot, per ship, because you can bring in more goods. Well we can get larger ships to ended at a much deeper depth now only at the Port of South Louisiana, but also, when it comes to major containers, that’s operating out in Port of New Orleans. And so having those larger ships creates more efficiencies, which actually attracts more shippers to come to the port. So the need for congestion relief is always good when we’re able to deepen the channel. Number two, we have to have more rail expansion. If you don’t have rail, you frankly don’t have a port. And having the rail capability to really be able to connect to those major markets throughout the United States, create some efficiency to have those transshipments from rail to ships are key. So at the Port of South Louisiana, we have three class on rail lines, which some ports be lucky if they have one. So we have the CPEC and the CN on the east bank of the river, and we have the Union Pacific on the West Bank of the river that we’re able to access. But you never have enough rail. And so rail access is key, especially for that last mile, being able to get that rail as close to the river as possible onto near our docks. You create that efficiency. It allows for a better opportunity to attract more businesses are even expand within your port because the key is the markets. So I mentioned the Riverside. We connect just by the Mississippi River, 31 States and two Canadian provinces because of the Mississippi River and its tributaries. Well, our market is actually Middle America. So the Missouri’s, the Illinois, the Ohio’s, the Indiana’s, North Dakota, South Dakota. So I call them big 10 country, right? So being a college football fan. So what happens in St. Louis? So Chicago and Cincinnati, because when you export 60% of the nation’s grain, you’re really working very hard partnering with America’s farmers. And right now we have a very serious situation with Ukraine-Russian conflict, where they were two of the top five producers of and exporters of grain in the world, feeding China, Europe, Japan and North Africa. Well, it’s going to be a point now where there’s more demand from farmers to feed those parts of the world. And so having that access to the Mississippi River, having the channel deepened, even access to rail to rail some of that cargo down and be more efficient in that way is very key for us long-term. We also need to look at infrastructure needs, increasing our funding for major infrastructure on roads and bridges to get the congestion out of communities and create dedicated trucking routes to and from the ports and reducing the amount of really traffic lights that trucks have to get into that last mile of the port. And so when we allow that that efficiency there, we’re actually able to attract more private investment, foreign direct investment to our ports. So those are critical. Infrastructure needs are very critical. Another major need is really about security, in particular cybersecurity.

So America’s ports represent 25% of the US economy. And we’re dealing with this new frontier when it comes to security, looking at the digital age and cybersecurity. We have to take a look at that to make sure that all the assets at the port, whether owned by the port or our private partners, are truly protected along with our people and our information. And if we’re able to really stay ahead of the curve or get past the curve, if you will, as ports and not lag behind, that will be in a better position as well. We’ve actually received over a million dollars before security grant funds from the federal government over the last few years to try to tackle this issue. We’ve also met directly with the CIO at the US Department Navy at the Pentagon to talk about the needs that we have to help the Pentagon understand the significance of our port and the ports along the Mississippi River in more detail than what they already knew. We’re getting ships from all across the world. And I know that the Pentagon is very interested in where the ships are coming from and different things like that. So we’re partnering with the Pentagon, trying to work with the NSA as well. Any way that we can. We also have great relationships with US Customs and Border Protection, and we’re hoping that eventually they’ll actually have a headquarters right on our site at the Port of South Louisiana. So those are the critical pathways. And I think lastly, we have to look at energy diversity. It’s not an energy transition, but really looking at diversifying energy production and alternative fuel. We’re actually going to be the first in the nation, second in the world to allow for e-methanol fuel bunkering at the Port of South Louisiana. That’s a game changer because now it gives an opportunity for many of the activity in the river to fuel up with a fuel that has a zero carbon footprint. And as you know, many companies are willing to locate within a port jurisdiction or even ask for the ships to be rerouted and pay a premium to do so if they know there’s an alternative fuel source that’s going to minimize or eliminate their carbon footprint. So we are open to all types of alternative fuels. We are not looking at putting all our chips on one, but looking at all of them. I liken it to the old days of Blockbuster Video when you buy a Blu-ray disc or HD DVD player, right? So we didn’t know who was going to win in the market, but they made themselves available to it. So we want to make sure we’re available to all the different types of alternative fuel sources.

Supply chain coordination: “The mall”

Jeff : Thanks for describing those challenges and those opportunities. I can see why the government has made a point to invest more in our port infrastructure. And it’s good to hear that’s trickling down your way. Given the significance of how you guys fuel and feed our nation and part of the world. Tell me about coordination. If there’s so many moving parts here. How do you guys play a role in trying to help coordinate between the terminal operators and the trucking companies and the railroads and the shippers and logistics, the freight forwarders? How do you coordinate? It just seems like a nightmare.

Paul: It can be. But I think first of all, it’s just the port industry, the maritime industry is all about relationships. And so though it’s a global industry, the relationship, everybody’s very close. So whether it’s the shipper, the terminal operator, the freight forward, the customs broker, we try to get them all in the same room as best as we can. And so the Port Authority actually serves as that honest broker, the facilitator, if you will, as the public agency, because as the public agency, our interest is having a comprehensive overall vision for the jurisdiction where everyone benefits. As you have private companies who have private interests to their shareholders. And so what we can say is, “all right, everyone can play in the sandbox”. And it’s our role to put in structures in place to allow for that to happen. Our number one goal is to foster economic development, which then obviously creates jobs, produces a tax base for the local community, which drives up the quality of life. Everyone can be a part of that process. And if we are the honest broker in that, we are able to bring all those folks together so everyone benefits. So that’s really the role of a Port Authority. I tell people sometimes we’re kind of like a mall. So in a mall, you have your anchor tenant, which every port has an anchor tenant, whatever that type of cargo is. And then you have other tenants as well as a landlord port. But our job is to make sure everyone is able to operate in the most efficient manner possible. And that’s the same with the Port Authority. And so when we talk about issues of rail, safety, security, transportation, congestion issues, everybody can come to the table with the Port Authority as the lead, working in conjunction with the state, to find ways on the state level and the federal level to help, whether it’s funding, whether it’s policy issues that need to be restructured. We can do that on behalf of the maritime community.

Sustainability

Jeff: Tell me how you balance innovation with sustainability. You had mentioned some of the green fuel and set something on your guys’ mind at the port level.

Paul: I think for us as an overarching vision, 30,000 foot level vision, making sure that there’s a culture of saying industry and sustainability can work hand in hand. They’re not mutually exclusive. And we need to find ways that everything that we do is environmentally friendly. We’re minimizing, reducing or eliminating our carbon footprint altogether. But then internally, when we look at innovation and sustainability, having a digital point and looking at GIS in particular, making sure that we’re efficient in maintaining the resources that we have. I’m a big proponent of finding new ways, looking at new school, but let’s take the best of the old school and let’s find ways to bring it together. And I think we’re in a unique place in time where much of that change is happening and trying to find ways to balance it. So I’m very proud of my staff. We have a very diverse staff from backgrounds, experience, from race, age, all that kind of stuff to where everybody comes in and brings their own ideas to the table. And, you know, it’s one of those things where if something doesn’t work, we move on, but we always want to try to be more efficient in whatever we do. So it’s very key to be innovative in every which way. Again, like I said, we’re looking at changing the way we do things and digitizing everything that we do, having a digital plan through the GIS program. We’re also looking at the energy efficiency of our buildings. We’re even thinking about putting solar panels on all of the transit sheds that we have. That’s an innovative way that would actually bring better costs to our customers as well on the lease agreements and all that kind of stuff. And they can actually use the marketing tools to say, “hey, we have an energy efficient facility that we’re operating out of, which could then help them attract more customers”. So we believe that everything’s on the table and we believe that we’re looking at every single idea. And as a result, we’re going to be better for it as a port.

Initiatives and improvements

Jeff: Solar panels, digital twins, digitization in general, cybersecurity. These are some of the things you mentioned. Any other future plans and initiatives you can share that the Port of South Louisiana is working on?

Paul : Well, I think those are the main ones. Also, we’re looking at trying to find a way to bring in a brand new I-10 exit to the Port of South Louisiana, which will actually open up more of the acreage that we have for development. It would get the trucks off the main drags of the community, give them a dedicated route. It would actually also serve for the law enforcement of the local county for evacuation routes, additional evacuation routes. So there’s a lot of security and safety that we’re looking at. And I think that’s innovative in many ways, because sometimes as ports, we can be in our own silos and forget to work with local law enforcement or local government authorities. And we have to think about what’s best for them as well. So that makes it a win-win situation for us. So that communication over the last few years I’ve been here has started back up again. Even when we look at development for sites, for example, we have a site in part of our jurisdiction that’s over a thousand acres. And I went directly to the local governing authorities, the local council, and the county president, and I said, “hey, here’s our interest for this site, but we also want to know your ideas for the site”. And so they said to us, “we love all the ideas except for no shore stacks and no pollution billowing out”. So I said, “deal”. So as projects come up and we vet them and we think they’re appropriate for the site, we’ll also reach out to those local community officials and say, “here’s what we’re thinking. Here’s the prospect. We would like your help in getting support in the local community as we bring this potential tenant”. And I think you have to have that, because as we bring in a local tenant and they build out a facility, that facility is going to go on tax rolls. They’re going to hire people, hopefully from the community, which benefits everyone. You basically could take the total payroll of a new company coming in and creating all these different jobs at an average salary of $80,000 a year or more. And you can take 4% of that, and that tells you how much sales taxes are going to be annual. Not to mention the sales taxes from them actually having to operate every year. And then all the other local vendors that are going to be supporting that facility. So we have worked very hard to keep that in mind of all the community business leaders that are going to benefit as a result of just this one tenant coming in and all the ancillary services. There have been many studies that have been done that says for every one direct job at a port, you’re going to create four indirect jobs. And that’s going to be right there in the local community. So we want to put a focus on our communities long term.

Jeff : So when you say, when you employ 10,000 workers, we’re talking about, you know, 50,000 people that are impacted in a positive way. 

Paul: Exactly. 

Looking to the future

Jeff : As we look to the future, there’s a lot of initiatives going on, and I know sometimes those take years. But any thoughts on, if we look forward 10 to 20 years from now, what do you predict will be some of the biggest changes and impacts?

Paul: Well, it all depends on the port, right? So we’re mostly a bulk port. And I think the significant impact over the next 10, 20 years is going to be two-fold. One on the agriculture side. Right now, we’re at 60% of the nation’s grain is exporting out of the Long Mississippi River. That number is going to move to 70% over the next 10 years. So more and more farmers are going to need a place to move that cargo. We have to be in a position with more docks, additional grain elevators ready and prepared, and have additional rail infrastructure as well as that makes a significant amount of the cargo of the grain. So, for example, we are working with a company right now to build one of the first new grain elevators in the last 40 years on the lawn, Mississippi River. It would be a $600 million development, and it would increase our exports of grain alone by 10%. That is significant. That’s over 10 million tons of cargo annually, which is great for our farmers. And it continues to put Louisiana on the map as feeding the rest of the world and the world being dependent on Louisiana and America’s farmers. And so we’re pushing that significantly. And as a result of that as well, we have to look at energy efficiency. Again, I can’t stress it enough. Reducing the carbon footprint. If we can do those things over the next 10, 20 years, we really will shift a lot of trade routes through the Mississippi River that benefits states like Illinois, Tennessee, Ohio, Indiana, North Dakota, South Dakota, Kansas. And everything surrounding.

Jeff : Make sense. What about technologies? What technologies do you believe would be the biggest catalyst for port innovation? You mentioned digital twins. You can have like a digital view of what’s going on, but what other technologies do you think will kind of change the game a little bit?

Paul: I think just having the innovation of finding ways to increase the quality of work for employees is actually going to be something that we need to look at over the next 10, 20 years. There are companies who have crane operators or bulldozer major equipment machine operators. They’re in a building with air conditioning. They can sit in the chair with different remote controls and control a bulldozer that is operating in the rain in a storm. And so you can actually be more efficient and have a greater quality of life for your employees long term. So I think that’s what we’re going to be looking at with innovation is finding ways to get the most out of our employees and the most out of the equipment in a much more efficient way to keep our employees safe. But also increase or maintain production.

Jeff: So basically augmenting them with technology that would allow them to operate in more safe conditions. So that could involve augmented reality. It can involve autonomous or automated robots. But they’re not right there like in the rain or in the weather or a more dangerous situation. They’re remote. So there’s a lot of technology that would kind of go into that. That makes sense. When you think about the routing and all the traffic that happens, what do you envision changing the game for improving that? Is there a data flow that you guys have now or is that still something that needs a lot of work kind of going into the future where you have data for like what’s coming in and out? Or are you kind of relying on the parties themselves to orchestrate?

Paul: A lot of it is just watching, right? A lot of it is just watching the market, seeing where the trends are happening. Sometimes it’s difficult to use the last battle plans for the last war. We’re different in a brand new world, if you will. So there’s different thoughts about it. We see the dependence now less. For Europe to be dependent on energy from Russia and more from the energy in Louisiana because all the energy that’s being produced and exported out. There’s also been talks about many companies because of COVID, more manufacturing getting closer to the market. So you’re going to see a lot more movement to Mexico and Central and South America to be able to get to the markets of the United States. And so that’s what we’re seeing as a trend. And as a result, we’re trying to find out what part of the supply chain can we help? With the amount of land that we have access, plus all the infrastructure we have from the water, the docks, the rails, roads, et cetera, et cetera. So having access to big markets, for example, on the West Bank of the river, we can go by rail and go straight to Dallas, which is a huge market without crossing the river. We’re positioning ourselves to be able to attract that foreign direct investment to significant lots of land that have access to the rail and the water to get to places like Dallas and even get straight up to places like Chicago. So we’re trying to figure out how we position ourselves with this changing of the landscape and the global marketplace.

Global partnerships

Jeff: You had mentioned the memorandum of understanding with the Ukraine Sea Ports Authority. And you talked about how that helps the Ukrainian people as well. So as two of the world’s largest and leading grain exporters, this is a big deal. Can you talk more about the partnership and how that’s important to the Port of South Louisiana?

Paul: Well, it was a significant moment for us to be able to sit there with a strong, brave, courageous delegation from Ukraine that helped us understand the significant issues that they’re facing in Ukraine right now in this conflict. And to be able to say to them that we understand your navigational challenges because we, at times, can have them too. And we’re willing to open up ourselves to help exchange thoughts and notes. It really goes to show you that this world is a lot smaller than what we think it is. This is a conflict that’s 5,900 miles away, and it comes right to the doorsteps of the people in the river parishes at the Port of South Louisiana. And so we opened our doors and we said, whatever we can help you learn, help you figure out what strategies or needs for infrastructures and efficiencies that we made, we’re willing to do that. Let’s talk about your rail needs and road needs and docks as well. So it’s significant for us because we’re going to learn a lot from them. When somebody deals with challenges, that’s when the best innovation comes out, right? That’s when you become most resilient. And so as they deal with this conflict, they’ve been able to talk to us about some of the ways they’ve been able to navigate through the Danube River and different things like that and looking at their channel depths. And you realize when you put it all in perspective, your problems aren’t as bad as others. And so you find a way to be resilient and resourceful as well. So we’re incredibly honored and privileged to have this agreement with seaports in Ukraine. And everyone benefits at the end of the day. And that’s what it’s all about. So our hearts and prayers go out to everyone that’s in the conflict to help everyone can stay safe as best.

Jeff : It’s amazing to hear and that you can impact people’s lives around the world and support the conflict in that way, in a positive way, and how interconnected our world is, even though it’s so far apart. Thanks for those perspectives. Any other thoughts? Any other thoughts as we’re wrapping up on the future of ports? Just have a couple more questions for you, but just any other thoughts on the future?

Workforce changes

Paul: Well, I think just like the rest of the country, we’re dealing with this transition in workforce from Baby Boomers, Xers, Millennials, and Gen Zers. And so I think we’re all going to have to work together to figure out a way for the proper transition. For that, there’s been this great silver tsunami that people talked about. All this tacit knowledge has been walking out of the door, trying to find a way to keep some of that knowledge. But also find ways to bring in the next generation workforce. And so that’s going to be something we’re going to be dealing with for the next five to 10 years to adjust. We’re all going to have to adjust to that process. And once we do, I think the workforce at ports and workforce in other industries are going to evolve as a result because there’s different demands, there’s different focus, different interests, how we’re able to operate.

Team culture

Jeff : Thank you. I think that resonates for a lot of industries that are facing something similar. So appreciate that perspective. Last question. What’s the most rewarding part of your job?

Paul : That’s easy. Spending time with my staff. I love my staff. And sometimes I get upset if I have to go home because I just love hanging out with them, getting to know them, helping each other grow in many ways. We have a lot of fun, but we get the job done as well. I love being able to lead a team. We got some great players on team. I’m a sports guy. So in every meeting that we have, I always do some type of sports analogy or metaphor. So my staff told me that I can only give those analogies based on what sports season we’re in. So right now, it’s just football and basketball. So I got to wait till the spring to do any baseball stuff. But I love the team atmosphere and what the culture that we’ve built over the last two years.

Jeff : They say a great company is similar to a sports team. Not just a family, but also a sports team. So I think that’s great that you’re bringing those stories through. Well, Paul, it’s been a pleasure having you on the show, hearing about Port of South Louisiana, your leadership, and all the insights that you have as we think about the future. Thank you so much.

Paul : Thank you. Take care.

Kristin Decas and Paul Kjar

Jeff : In this episode of The Future Of, we’re joined by three port leaders in a special two-part series to explore the future of ports. Today, we have guests including Kristin Decas and Shaun Kjar. Kristin is the Port Director and CEO of Port of Hueneme. Port Hueneme was established in 1940 and ranks among the top 10 US ports for automobiles and fresh produce. About seven years ago, they became the first port in California to become Green Marine certified. And it was voted the greenest port in the US at the Green Shipping Summit. So we’re excited to hear more about that. Port Hueneme is also unique because it has an innovation lab in partnership with the Naval Surface Warfare Center. And local organizations focused on emerging technology. So as we think about innovation, we’re excited to hear more from Kristin, who has a Master’s in Environmental Policy and Law. And previously served as the Port Director and CEO for the Port of New Bedford. Welcome, Kristen.

Kristin Decas : Thank you for having me.

Jeff : I also want to introduce Shaun Kjar, who’s the Director for a newly established inland port. So we’re excited to kind of have this balance of an inland port and a sea port. And that’s located in the Central Utah Agri-Park. Shaun and his team are building a location where agriculture and adjacent businesses can process and distribute goods all around the state. And their primary goal is to create a better future for Utah’s family farms, economy, and food security. And prior to leaving the Agri-Park, Shaun was a city manager and also a communications professor at Snow College. So it’s great to have someone representing the inland ports leadership and someone who’s just starting Fresh as well. So welcome, Shaun.

Shaun Kjar : Thank you, Jeff. Appreciate it.

Jeff : Kristin, if we can start with you, can you tell us, the listeners, a little bit more about yourself?

Kristin: So I actually think it’s always fun to start anecdotally. I have a kind of a fun story. I’m Norwegian and my grandmother was actually born in Norway and her grandfather was the harbormaster of Bergen. Had a son who sailed clipper ships and then went on to steam ships. And in his tenure, he actually moved to Philadelphia where he worked for a company called United Fruit, which is today Chiquita, one of our biggest customers in the trade. So it was just kind of fun. I think somehow my ancestry may have driven me into this business, but I really studied in dry areas. I went to college at the University of Vermont for studying economics. And then I went on to Denver, as you mentioned, and I studied environmental policy and law. There really isn’t a port 101 class. I think we all have unique and interesting stories on how we entered the port business. But for me, after I met my husband today at UVM, went to college in Denver and then went back and married him. And he’s from Massachusetts. So that’s how I got rooted in Massachusetts. I began my career working for the Department of Environmental Protection, actually heading up their alternative vehicle fuel program. But I was living in a town called Wareham near Cape Cod and commuting to Boston, which quite a hike. It’s where I am today in Oxnard area and commuting to LA about an hour in traffic, but add snow to the mix. And I wanted to have babies, all that good stuff. So I ended up landing a job in the satellite office out of the governor’s office and something called the Governor’s Seaport Council, where we had a $300 million bond bill to invest in the deepwater seaports of the state of Massachusetts. And I got well-versed in articulating policy around maritime and also really learned a lot about infrastructure. And then the mayor of Port New Bedford took a shot on a young woman to come and run his port. He had a space. So I went and I ran the Port New Bedford for six years, applied for this job here at the Port of Hueneme about six years after that. And I was fortunate to get the gig, looked at my husband. I said, you want to take a big move and go out to California and take advantage of a nice career jump for me? And here I am today, 12 years later. So, I am now the Port Director here in Port Hueneme. And that’s sort of how I broke into the industry. And I date myself here, but I’ve been in it now about 21 years.

Jeff: Thanks for that background, going all the way back to your ancestors and how that maybe sparked some interest. That’s a fun story. Shaun, what about you?

Shaun : I came from a farming family. And so here in Central Utah, we were in the high mountains, 5,500 feet elevation with up to 10,000 feet just right out our door. Beautiful place and based in agriculture. And as a city manager in Ephraim about five years ago, we were seeing is we’ve got a number of producers in the area that have capabilities greater than what they’re able to do because there’s just a gap. They’ve got to bridge that gap. You’ve got to complete the chain all the way. And so some of them have been able to make it work. And more and more, the family farm has just gone away. The profitability hasn’t been there. So a couple of years ago, The Six County Association of Governments, which is a group of Six Counties here in Central Utah, make up about 30% or about a third of the agricultural production for Utah. So we decided to talk to the producers, to talk to the people in the area and say, what is it that you need to really make a difference? And it all came back to agriculture and the direct connection and the adjacent benefits. So the primary, secondary, tertiary benefits that come out of investing in opportunities. And so they looked around and said, well, it looks like we need help with processing. Some of the processors have just had to move on or move different areas or age out. And so we’re coming in and making an area that will allow for processors and help with distribution. And I think the goal is, you know, we want to benefit our area for sure, but I think it’s also to make a greater link to those like Kristin and the work that they’re doing. I know we’re capable of more and I think we can broaden that reach a little bit and it’ll help with food security in our area as well. And that’s a big push for us also. It’s really exciting. It’s a really neat opportunity. I came at it from that angle of city management and wanting to have solutions and found that some of the people that were willing to and had money to be able to do these things, this processing, they ran into regulatory issues and logistical issues with utilities and other things that just were limiters. And you repeat that over and over again, these small communities that dot across Utah, and it just makes it nearly impossible for them to get something going. So if we can make a site that would allow for some of these places to locate, then we think that the producers would be able to respond and produce some of those things. And it’ll make smaller farms and smaller areas able to produce a little bit more. We’re excited about that possibility.

Jeff : You guys probably both deal with a lot of complexity. There’s a lot of players that are involved in imports. I’ve heard it described a mall where there’s a lot of different parties that are involved. There’s both sides of the commerce and there’s a lot of coordination, kind of orchestration. I imagine that’s stressful sometimes. So what do you guys do for fun to kind of break free of some stress? Kristin?

Kristin : Well, you call that dance the supply chain. That would be the mall. Yes, and it’s very complex, but it’s also fascinating, really, when you think about it, how goods get from origin to destination. And the consumers enjoy the commodities, both on the export and import side. But for fun, I love to hike. I do a lot of yoga. I really enjoy hot yoga. And I enjoy time with my family. I have two young daughters. I’m now an empty nester as of this year, and I’m super proud of them. One is going to UCLA as a freshman, and the other is a senior up at Cal Poly, which are really strong schools here in California. So I’m super proud watching them grow. And for fun, my husband and I take time to go visit with them and hike with them and those sorts of things.

Shaun : Any chance I get to spend some time in the mountains in pretty much any form, we’ll take it.

Biggest challeges

Jeff : Well, thanks for being here with us to talk about the future of port innovation. From the established perspective to the brand new perspective, this is great. Innovation often goes hand in hand with problems and challenges. And Kristin, what would you say are some of the biggest challenges facing the Port of Hueneme?

Kristin: Sure. So interesting. I’ll start with a lot of probably hype, particularly during the COVID years, was around supply chain congestion, particularly on West Coast ports. And interestingly enough, that is not a challenge for the Port of Hueneme. And there’s a reason why we run our port a little differently. And I think, Shaun, you’ll find this interesting as an inland port, the way that we operate. We actually have a relatively small footprint. We’re about 120 acres large. And then we share our facility with Naval Base Ventura County. And we have a revenue sharing agreement with them or infrastructure sharing agreement with them so we can use their assets, which expands our footprint to about another 54 acres when you think of waterside infrastructure. But what happens here, when cargo lands at our facility, it doesn’t sit here. It actually goes out to an inland distribution center that’s not too far from our port. It’s about a mile to eight miles away. And we have close to 20 of these. And these are truly extensions of the port. So, for instance, when a Del Monte or Chiquita container lands at our facility, it doesn’t stay inside the gate. It literally moves outside the gate. It will go to separate destinations where the customs inspections actually happens there. So they truly are extensions of the port outside the port. Interestingly, with our automotive cargo, the cars are offloaded by our longshoremen. They’re parked in the dock for a very short period of time. And then vans of people actually come down, pick up the vehicle, and they’ll drive them off port about a mile down the street to the distribution facility where they get processed to go into retail markets. So in that case, we have all of these extensions of port outside the port that are private terminals. And from there, they go to market. So you don’t have bottlenecking at our gate. All the distribution goes from these separate places. And so during supply congestion, we were actually part of the solution. For instance, we launched a service with FedEx and a company, an ancient UCM, who landed the vessels for FedEx. And we were able to get a lot of cargo that would have got stuck in line in the San Pedro ports to come here. Things like medical supplies, electronics, and then brands you may recognize like Crocs shoes and Hanes underwear and Skechers sneakers actually got to the shelves because of the Port of Hueneme. So we have an interesting model that marries into inland ports. And if you look at the San Pedro Ports, Utah, it might not be that far a stretch because they’re so gentrified. They need to get to inland ports. And I will say this just quickly, Shaun. We are known as the port that farmers built because we are very heavy. We handle a lot of refrigerated cargo and there certainly could be a nexus. We’ll have to talk offline for commercial business here. This may be a wonderful introduction, but we’re experts in the supply chain for cold and refrigerated cargo. And actually, even if you handle nuts or whatever it is, we could get it out into some markets for you, particularly in South America and Latin America. But what keeps us up at night is being competitive and holding onto your niche and your market share. In California, we have very rigorous laws, some of the most robust, honestly, in the world. We’re the only complexes in California in the world that are required to plug in our vessels when they’re at docks. So there’s zero emission at birth. You don’t see that in Tacoma. You don’t see that in competing ports and Gulfport. So for us, it’s keeping a competitive advantage while tackling and addressing these robust regulations around sustainability and zero emissions. And we are tasked with very rigorous rules. I’ll give you one example, and I think you’ll appreciate this, Shaun. As of January 1st, 2024, this year, you will not be able to, in the state of California, be able to buy a drayed truck that is not zero emission. So you can use your older trucks if they’re 2010 or newer. But if you go out after January and buy a new drayage truck, it has to be electric. And we need to build all the infrastructure around, support all of the commercial operations throughout the state of California, including the San Pedro ports, Oakland, Humboldt, you name it, all the ports, San Diego, all of us have to have access and enough market availability of these drayage trucks to meet the demand that will come with that. So we embrace it. We’re all in, but there are challenges around funding it. There’s challenges around having the right maturity of the technology to be able to tap into it and ensure that you have delivery of what is expected of you in terms of becoming zero emission facilities here in the state of California.

Jeff : So Kristin, during the pandemic, the Port of Hueneme wasn’t really a bottleneck is what you’re saying. It wasn’t really slowing things down. Because you had the distribution immediately into these inland locations that were handling more of the routing and the processing, enabled you guys to be a leader during that time.

Kristin : Yeah. In fact, our container business went up 90% during supply chain congestion without congestion. And our exports went up 210%. I’m sure you could appreciate, Shaun, what happened to the Midwest during supply chain congestion because the containers were so lucrative for the ocean carrier market that they were making $20,000 a box in an import. They sort of left that export behind. And because of the nature of our business and dedicated services, we really did pick up some of that export activity too during supply chain congestion.

Inland ports

Jeff: Shaun, for you, what are some of the challenges unique to establishing a new port and an inland port?

Shaun: There’s a lot, you know, it’s really interesting to hear Kristin talk about Hueneme and what they’ve been able to accomplish. These other ports have already gone down all these channels for us, right? Like they’ve gone through and they’ve fronted these problems and anything that we’re going to front as we’re starting this new inland port and this new project. We can look to the examples and the experience of those who’ve already gone before. It really makes a lot of sense. I love hearing about the model, the idea that you take it in and if you can spread that out, just give a little air gaps,  right? Like it just can help so much with that distribution. And I felt like that’s something that we’re going to be able to do is that if we’re more organized, closer to the producer, it will make the port’s job a lot easier. And so if we can do some of that and then work can do what they do best, which is shift really quickly and get it out to where it needs to be. I love that. I think that’s great. Some of the challenges that we run into or that we’re looking at now are one. It’s one of those things that there’s already supply chain things happening, right? And we’re coming into this and we’re hoping to bring in new product. But one of the challenges is being able to supply like the containers that are going to be coming back. Are we importing just as much as we’re pushing out? And how do we rebalance that?

Jeff :There can be great imbalances there between that that comes in, that goes out and where you store all that.

Shaun: So it’ll be interesting to see how we really get through that. We don’t know exactly how it’s going to go because we don’t have agreements with all the producers yet. And we know that there’s going to be a demand to bring things back in. A lot of the main challenges are that this is new. There’s not really a regional facility like this that I can point to. There’s definitely not one in Utah. And we’re grateful that the folks at the Utah Inland Port Authority have been so helpful. Ben Hart and his team have been really instrumental in working with the Six County Association of Governments who I work for to make sure that this is going to be successful. Because they see this model being a useful thing that in this area we can take in. What we’re doing, make sure that it’s organized and then go through the other channels. We’re already well established and make these connections. And the easier the connection is, I think the more benefit there is for the end consumer and the whole chain. I like that a lot. But there are a number of challenges that we run into and weather is one here and it is everywhere, right? How are you going to deal with two inches of snow today? And that’s a small storm. We’ll have a lot more this winter. Why? Because the wide swings in temperature can make it difficult. And then as Kristin mentioned, expectations and regulation changes that she was able to just keep doing what she’s been doing. It would cost less. And so from the front end, we’re trying to look out and say, 50 years out, what are we going to say about this project? Are we going to say this was a good idea and we did this right? Or are we going to try and reinvent the wheel the entire time? I really think we need to look ahead and plan for what’s coming now. I think that’ll make it better.

Infrastructure

Jeff : As we think about ports in general. There’s a lot of coordination, you know, there’s the trucking ships, the railroads, the operators, all the logistics, the freight forwarders. And I know I’m just mentioning a few of the parties that are involved, but there’s a lot of coordination and a lot of silos that happen because you have a lot of different parties. So yeah, I imagine that’s challenging. Kristin, from your perspective like, you know, what’s the role of the port and trying to coordinate all this. We hear about the government trying to create more infrastructure to support coordination, we realize this has been challenging for a lot of other ports. Any thoughts on that challenge and the need for more?

Kristin: I‘ll start locally here at the Port of Hueneme. I think we do have one advantage here. I believe it to be an advantage in that we run more like an operating port than a landlord port. So we can really make decisions around who we do business with. So, for instance, we have a direct contract with the ocean carriers. We have direct contacts with the shippers. Just by way of example, the San Pedro ports are landlord ports. And so they really lease to the terminal operators. And so the terminal operators are the decision makers and how the cargo comes in and what car goes in. And they just have to adhere to the leases of those Port Authority leases, you know, the terms and conditions. Here we set the terms and conditions and we decide who we play with. And why does that matter during supply congestion? We could say no. We could say if you’re not coming to our port, if you don’t have a chassis, a trucker to come pick it up, a yard outside the gate to take it to you. And if you can’t get your stuff out of here in 72 hours, you’re not welcome. So we really can help conduct the orchestra, if you will, about what commodities come here. So we don’t have trucks lining up at our gate, blocking driveways of our local community. We have a lot more control. And I think that’s somewhat of an advantage. There’s probably pros and cons to landlord ports versus operating ports. And I could mention some of those. The larger ports don’t have to. They can push these environmental rules over to the terminal operators where we have to implement those rules. So there’s pros and cons to them. But in terms of supply chain management, it does give us a lot more control on who we do business with as an operating facility. So I think that gives us more of a play in terms of supply chain. But to your point. It is a dance. And we do work in silos, kind of take this in a different direction. But as the IMO is demanding that ocean carriers have 50 percent reductions in emissions over time and are pushing into a lower emission fuel for the ocean carries and not determining what fuel that is. How are they going to bunker if they’re not talking to the ports? And we often get in silos like that. If you’re going to use ammonium fuel or methanol fuel, where are you going to fuel it? And so we need to do a better job at talking to each other about those sorts of things and infrastructure demands. If you’re building bigger ships and you’re going to call on our ports, you change the whole supply chain and how we do business, because all of a sudden we’re going to need more gangs to offload these ships and we’re going to need bigger and larger last mile infrastructure roads to get this into the marketplace without having congestion. Those are challenges for some of the bigger ports, right? So if you’re getting much more capacity on vessels and landing less of them, it changes everything that happens land side. And you’re not. Not really seeing one hand talking to the other in those circumstances, which causes unintended consequences. And I think that, yes, the ports can actually serve a role as a facilitator in those conversations in terms of connectivity with all the different players and actors in the supply chain to try and orchestrate efficiency as we’re seeing changes in capacity and those sorts of things.

Jeff : Shaun, as you think about coordination, coming new into the space, what are some of the plans underway to make sure that that’s efficient?

Shaun : Probably the start is location, right? So over the six counties, it’s really for rural Utah, unprecedented. I’ve not seen this where county leaders, county commissioners came together and they looked at this as an opportunity and they put forward funds, even though they knew that the location wouldn’t be in every county. The main location is going to be in Juab County. And that was it was such a surprise to me. I was really glad to see that they were able to work together to do that because there is a site in Juab County that brings some of those things together. So there is freeway. There is rail. There is animal byproduct processing, access to the Wasatch Front and employment. You know, if you’re looking at commuting patterns for employees and things, there’s quite a few things that when I feel just really excited about it because we’re at the start of this and we get to cite where this goes. We get to pick where it goes. And think about some of the things, the utilities, the redundancy of power and gas and creating a wastewater system that’s robust enough that as these different entities are going to be locating here, it’ll be something that we really can bring together a lot of products and move a lot of product. And so that’s exciting.

Jeff: It’s clear that infrastructure is a really big part of efficiency and thinking about how you facilitate the flow and the resources. Shaun, you’re a communications professor, though, like you have that experience. How do you facilitate good communication and data flow? How are you thinking about that in a new port?

Shaun: I found my experience with communication has been that it doesn’t matter how much you know, if you’re not able to communicate that in a way that’s understandable to other people, it won’t really matter. You need to be able to share information to understand what another person is trying to communicate. So having that as just a base assumption in an organization is huge. When you know that there’s open communication and that the attempts that a person makes in communication are going to be appreciated, right? So I’m big on organization as well. I think that if you’ve got an organized message, it can be simpler and it can be more straightforward that comes from both ways.

Kristin: Jeff, if I could quickly piggyback on that too, and it just tripped my memory about something that there is a big initiative at the federal level through the USDOT to try and collect data at a micro level from all the different actors in the supply chain to try and diagnose where you may have bottlenecking ahead of time. And so they’re tasking a lot of the actors in the supply chain to collect data to feed into the system, and they’re calling it flow. And here in the State of California, our governor has had the insight to give $30 million to the five container ports in the State of California to build the software and the technology and the infrastructure to be able to capture this data to feed these systems to try and diagnose what’s happening in the supply chain. But to Shaun’s point, it’s not going to work if everyone doesn’t play. The data is good data, and then it’s used in a way that is watching or whatever. Is that working or is it not working? That sort of thing. How effective it is going to be if it’s not accurate and efficient and a proper diagnostic tool. So it’s challenging to do this exercise, but at least in California, we are putting funds into it at the local level to at least build efficiencies at our own complexes, build pipelines through ADIs and those sorts of things into bigger systems that may help diagnose what’s happening in the supply chain from a data standpoint. At least it’s some solid information to start with at first.

Innovation lab

Jeff : It’s nice to hear that there’s some funding to support that orchestration because it does require a lot of investment. And you can have good relationships and have good communication when you have the volume that you guys are dealing with. That’s where I think the data and the technology and understanding where the bottlenecks are when you start having massive increases in volume starts to become really important for the future. Kristin, I understand that the Port of Hueneme has an innovation lab, 60,000 square foot facility. And can you tell us more about that lab? And some of its impacts or initiatives? Is it just getting started? Like, how have you guys used it? And how can that be used for the future?

Kristin: Sure. So we have kind of a very awesome, for lack of a better, innovation technology hub here in our backyard. We’ve dedicated about 10,000 plus square feet of a warehouse to innovation and technology. This is through a collaborative with our local economic development collaborative with a company called Matterlabs, which is from the Silicon Valley and has access to venture capital and all that knowledge around tech and how to work with entrepreneurs and startups. And then along with the Port of Hueneme ourselves, and then with Naval Base Ventura County, and it’s actually going to involve NAVSEA, NAVFAC, which is NAV Facilities, and NAVAIR is going to join the party shortly.

And the Navy’s brought about 8 million dollars worth of equipment and technology into this lab. So we could literally 3D print a car engine in this incubator. We have a ten-thousand-dollar water tank where the FBI comes in and will test underwater robotic technologies. We have drone cages. And then we open up the port too, to be a playground for incubating this technology water side. We have explosives going underwater and seeing what happens there and dive teams going in and all this really cool stuff. And it’s gotten this designation, two designations. One, it’s a tech bridge for the Navy. And I believe there’s 13 of these worldwide for the United States military. And what it does is it invites the entrepreneur into the space to one, develop their technology and hopefully maybe land a contract with the DoD or vice versa. Something’s getting developed with the DOD that could come out and be good for the US consumer. You fine tune it in this space and then you sell it. And we’ve had success stories both ways. And then we also got a designation from the governor’s office as what’s called an iHub, an innovation hub. And we get two hundred and fifty thousand dollars a year to open up this space for minority and women-owned businesses to come and play and incentivize their participation. And just, I have my cheat sheet here, but some of the success stories, there’s a company called Bunker Supply and they developed an auxiliar collar for neck injury prevention for our air force officers and have been successful in landing a contract with DoD. We have a company called EDLOR and they are using AI to centralize assets, documents, contact knowledge, inventory, workforce management, and also got a contract with a DoD company called Battery Streak, who’s commercializing battery technology to drastically reduce lithium-ion battery charging from hours to minutes. And they’re expanding their bandwidth with multiple DoD programs. And one of my favorite stories was there’s a gentleman that was a student at a local university came in here and they developed a starter for a rocket ship that made a launch immediately. It didn’t have to take multiple times and they went out and they launched this rocket ship. And so this person now has turned that idea into a $5 million business. So it’s pretty neat stuff. And then we opened the doors to our local community as well. We host local robotics competitions for schools and those sorts of things. And we also do something called Lego First. If you haven’t heard of it, it’s a regional, it’s a national world robotics competition. And we have for two weeks, 1400 high school students come in here and play with their robots that they’ve been building all year and compete. And it’s really almost like NASCAR. They go into a pit, they try and beat each other and they do all these obstacles. And then they go back to their pits or their home or headquarters like you would do in NASCAR, right? And you fix up your robot for the next round of competition. There’s like 20 kids tied to each robot and they have all these organized drawers and everything, what’s in what and how you fix the robot. So they’re all ready for the next competition. And then the winners go on from here, we’re regionals, then they’ll go on to nationals and then they go on to world. So we kind of really stretched the bandwidth of this from youth to commercialization opportunities for our local entrepreneurs.

Jeff: Sounds like an amazing hub for ongoing innovation. Can other ports come and use the facility as well? Or is it just something for your local region?

Kristin: I think we do partner up with, for instance, local Navy here in Ventura County has shared technologies with Navy San Diego. And so you do see bridges in technology and you do see entrepreneurs. We try and encourage local for the economic development of our local economy, but we would not disparage partnerships with other ports to create opportunities that would be good for the US consumer and our national military, for sure. 

Shaun: That’s so exciting. That’s really neat to hear. I know in Jared Diamond’s book, Guns, Germs and Steel, he talks about we always say necessity is the mother of invention or we make things because we need them. And he flips it and says invention is the mother of necessity. And what you’re allowing people to do is experiment and try things and put stuff together that we then find, you know what, we need that. That’s amazing.

Next 10-20 years

Jeff: As we look to the future, how do things evolve in the next 10 to 20 years?

Kristin: So our goal is actually to become the nation’s first decarbonized port footprint. When you take the voyage of the vessel, the harbor craft at it, and the movement of the trucks, that’s going to take a little more time. But what we can control in terms of handling equipment, having our vessels plug in at dock, we’re driving towards a zero emission footprint. And that takes a lot of money. And it’s also really being governed by these rigorous rules that come from our air resources board here in the State of California. In 2014, I had to have a shoreside power system installed here at the Port of Hueneme. And we only had 4 million in the bank. And it cost 14 million. So we had to get very creative in how we were going to build the system. We did new market tax credit deals. We found money from the EPA. We got money from the state. But we were able to build it. We were able to grow our business, too, which is now our reserves are very strong. We have upwards of 30 million in the bank. And we’ve actually bought a 20 million asset. So we’ve really, over the last decade, grown our reserves to help with this. But we can’t do it alone. So we really need some funding from the state. And I think our play during the supply chain resiliency and whatnot really put us on the map as a leader, one of the leaders, I guess, in the world of ports here in the State of California. And we’ve been very fortunate to land an 80-million grant from our governor to help us with this quest towards decarbonization and modernization of our facility to both grow our business while building a zero-emission footprint. So we’re going to be doing some really exciting things in the space. We’re going to be building reefer plugs that will run on green hydrogen fuel cells. We’re going to be retrofitting our north terminal so you can plug in both roll on ships, roll off ships with the automotive ships. We’re going to build something with a company called Stax, most likely. We’ll see. But something called a Bonnet, which you literally put a hat over the stack of a ship so it captures emissions and it doesn’t pollute while it’s at birth. So we’re really playing with all these new and emerging technologies. We’ve also received about another 23 million in grants from the federal government and from our local Ventura County Transportation Agency, which is under SCAG, which is the association of governments here for Southern California. We call it SCAG. But we landed a lot of, a big pot of money. So if you add it all up, we have about $103.7 million to begin this quest to really grow capacity while going green. So we’re really excited about that. And we see the future in creating a workforce that supports, frankly, our disadvantaged community here in Oxnard, be able to tap into all these green jobs, our local labor force, having the opportunity to build all this infrastructure. We have a project labor agreement. So it’s not just about moving goods, but it’s about creating workforce opportunities, about creating a better quality of life through emissions reductions, and then creating economic prosperity through commerce. And I think that’s a big part of our future. But we can’t fool ourselves. This is a big job that we have in front of us. And when we go in this direction, I mean, there has to be a strong conductor at the federal state levels, if you will, that looks at grid capacity. Do you have enough power to fuel this transition into electrification of all these drayage trucks that I was speaking of? If we’re going to talk about Long haul drivers, by 2035, our trucks have to be zero emissions. So we need infrastructure to be able to fuel these trucks that are going to be moving around the country. And how are they going to fuel up when they get out of California, right? So there’s a lot of work and homework ahead of us. But at the Port of Hueneme, we’ve been fortunate to at least have some seat money to do our part. And I think at the scale and size of who we are, we will be able to have a footprint here that can support a zero-emission economy. So we’re pretty thrilled about that. And we see that being the direction of the supply chain over time into zero-emission. It’s interesting. You ask 50 years, 2050, I think is when the IMO wants to see the ships be on new fuels and decarbonized. So there’s a big task ahead of us, but it’s an exciting task. And I think if we embrace it and we work together and collaborate with all the different players in the supply chain and all the policymakers and the developers of the different fuel economies, I think we can get it done.

Jeff: It’s amazing. And it sounds like Port of Hueneme can be a world leader showing how you can balance both innovation and sustainability. Being one of the world’s first ports to become Green Marine certified and then to be the greenest port in the US. And then to have all this investment that’s coming, a port to look to, essentially, as you think about balancing both. And it helps to have the state of California behind a lot of that as well. We know they set a lot of regulation that helps pave the way.

Kristin: Yeah, and all the ports here are really all in. In fact, you know, we had another big, interesting grant that came, infused the state, a $1.2 billion grant from the federal government for hydrogen development here to really kick off and launch the economy around hydrogen. So I don’t want to top my horn too much that California has been a leader in this space. And we’re fortunate that they are bringing financing to help us all pave the way towards a green future. And Hueneme is excited. Yes, we did get that designation as the greenest port through our Green Marine certification kind of landed us that vote at a world shipping summit in 2017. So that’s a fun thing to say. But interestingly enough, to get that designation, you can’t say it. They have to say it. And you have to perform better year over year over year to continue to get Green Marine certified. So there are auditors, if you will, to make sure we’re doing our job.

Future tech

Jeff: Shaun, for you, being a new entrant in the space, I know you’re just establishing something new. But what technologies do you think will be big catalysts for port innovation? 

Shaun: That’s a really good question. As Kristin was talking, I’m thinking about power generation. And as I’ve dealt with some of that outside of this position and other positions, you look at the development of nuclear, the small scale nuclear projects that are, you know, there’s some difficulty, there’s some challenges there. But there’s some good possibility you look at, like green hydrogen, and some of the opportunities that’s there still has some development, if I understand, but there is some possibilities there. And so I think that it makes it really difficult to do a lot of this stuff if you’re not powered. And so I think solving that is going to be huge. I’m really curious to see what technologies emerge and what solutions there are to move that forward, because that’ll make a big difference in what we’re able to do in ports. 

Jeff: Kristin, what about you? What technologies do you see being really important for the future, if we kind of look ahead?

Kristin: So here at Hueneme, we’re looking at a mix of technologies. For us, we did actually get a $200,000 grant from the California Energy Commission to build our blueprint to decarbonization. And for us, electrification looks like the strongest opportunity for us to meet that goal. But we are building solar panels that will, for instance, fuel our administrative offices. We are looking at the green hydrogen for the fuel cell technologies. And I think if you look at the supply chain holistically, electrification is probably going to make a lot of sense for the short haul trips and the drayage trips. But the long haul, it might be more of the green hydrogen that Shaun was speaking to. We also own a railroad, Shaun, just so you’re aware of that, too. We can take your goods in by rail if needed. What are locomotives going to use? I think there’s some posturing around there and exciting opportunities to kind of look at, you know, how are we going to push cargo on our rail systems? And those are privatized. So that’s a little different and how they’re going to play in this space. In California, though, they will probably have to meet some pretty rigorous emission reduction criteria. So it might not be a one size fits all fuel. Also here out in California, and I know it’s getting established pretty strongly on the East Coast as well. From my days in New Bedford, we built a terminal support offshore wind power. And out here now in California, we’re looking at the deployment outside Morro Bay and some other areas for offshore wind farms to also be generators of power and bringing that online to help build capacity into the Green with green Energy. So if you use fossil fuels and power plants, you’re not really zero emission, right? So you have to look at how you bring that Green Energy into those power plants and that power production, too. So it’s a big task ahead of us, but I think we’re all up for the challenge. And it’s just how do you get it done? How do you build that capacity? And it’s going to be a mix of fuels, in my opinion, probably for the Long haul trucks, hydrogen and short haul electrification and a lot of question marks still. There are a lot of question marks.

Future of supply chain

Jeff : Definitely a lot of innovations happening. It’s changing the game right now that could help us all leap forward. But some stuff goes fast and some stuff goes slow. It seems like the technology has a life of its own. And sometimes it’s paving the way and sometimes it’s just it’s not there yet. And so there’s a lot of hype, but it’s not quite there. Regardless, as we think about ports, there’s like the port 2.0 around process, port 3.0 around how you manage by exception. And then the port 4.0, which how do we get to kind of good orchestration? And what do you guys think is needed to kind of get to the port 4.0, even beyond your own ports? But like, as we think about ports in general, managing in a more orchestrated manner, I mean, not just by process or exception. Any thoughts for the future about how we get the entire supply chain operating at that level?

Shaun: I think a lot of us often get so focused on solving our own issue, the thing that’s right in front of us that we forget that we’re connected to others. And so I think a realization. If we found systems like on a small scale in our community here, systems that make it easier to understand what another person is doing and what the impact is going to be if you twist this knob or pull this string. And so, yeah, I think if you get systems that can communicate well with each other and people that are able to do that as well, it’ll help a lot.

Kristin: I think you hit the nail on the head. It’s going to come down to collaboration with all the different players from the innovators, the technologists, to the policymakers, to the fuel providers, to those setting the rules and regulations like the IMO. For instance, we’re tasked by 2025 to have our automotive ships plug in or have that bonnet system. But we have the funding to build what they plug into, but the IMO hasn’t set a universal standard, so we don’t know what to build. We all really need a strong conductor that will organize. You need a quarterback, a really strong quarterback to bring in all the different players to really have conversations about what we can do, how we can do it, and how we get there. I call it assess and invest. Assess first, learn what you got to do. Let’s do it right the first time because we’re changing an entire fuel economy here. So if you make poor investments, the whole thing breaks. You got to do it right at the get-go, and then you bring the money in to get it done. And you don’t want to bankrupt America, and you don’t want to bankrupt the Port of Hueneme doing this. We don’t want to lose all of our business. I mean, what’s the point? We have the greenest port, but no one comes here. That’s not good either. And we lose all the jobs in the workforce behind it. So it’s making it competitive. It’s making it affordable with the right intent and the right thing to do, which is to create a better life for our workforce, a better life for our community, and a better environment in general. But it’s a big task, and you really need a strong coordinator, and everyone has to come to the table.

Jeff : Think that’s what makes it challenging and why there’s so much opportunity for innovation. Shaun, for you, where do you go for insights? You’re kind of new to the space. You’re just getting started. Where do you go for insights for port innovation?

Shaun: Right now, we’ve tried to just stay really focused on the basics because that’s where we’re at. So we’re focusing on one of the challenges in Utah is water, right? And so acquiring the water needs to be able to meet our needs, the property and making sure that we’re going to meet the regulations and requirements for the state, but also for the federal funds we’ll be bringing in. So those challenges, I think, are there. But there are a lot of resources that I know we can tap into. And we’re just looking forward and gathering those up right now because I’ve got to stay focused on these basic things and get that basic done based on correctly.

Jeff : You’re at the basic infrastructure level, kind of getting the basic setup, preparing for a lot of the innovation that’s needed as you keep scaling. Kristin, for you, you know, you’re already at Center of Innovation, but where do you go for insights on core innovation as you think about preparing for the future?

Kristin: I play with our associations, for one. I had the luxury of actually chairing both our California Association of Port Authorities and I was chairwoman of the APA in 2015. But I find that you really can learn about emerging technologies, best practices when you compare nodes with other ports and other players in your business. But I think one thing that I had the very good fortune to participate in and is something called a CEO Summit that’s put on by Yale and it’s held twice a year. But the one I attend and I’m going to be going December in New York and it’s held in New York City. And they have the capacity to bring in all of the CEOs. And I only get invited to this party because my advocate, our legislator advocate in Washington happens to share space, office space or rent space to the organizer of the CEO Summit. And as a CEO, my title, I get to come in. But there’s the CEO filing there, UPS, FedEx, GM, General Motors, Fords, Macy’s, Sears, Robux, the Pfizer of the world all come in. And it’s just fascinating to hear all this intellectual capacity talking about the challenges and issues in front of CEOs today. And it’s just that’s been very eye opening for me to hear from business leaders from around our country and what’s on their minds. What are the challenges in front of them? One particular summit, they were talking about how unpopular CEOs are and how do they fix that? Other times they’re talking about the dynamics of politics, you know, between Trump and whatever else. And the gentleman that hosts this, his name is Jeff Shoenfeld, and he knows who is on what side of an issue. And he kind of gets that debate going. And so you hear those sides of pretty important stuff that our country’s facing in these big CEOs or something. So that’s a space I go to look up to the people and the leaders in the business world.

Jeff : Last question for you both. I appreciate all your insights so far. What’s the most rewarding part of your job? Shaun, start with you.

Shaun: You know, small town Utah, we can do more than we think we can. And so we looked at what can happen with our supply chain and with our food security here in the area? I think there’s definitely an economic development piece that happens where when there is a market traded or a correction of a market failure. And so I’m really hopeful and excited that as we get that done, we’ll meet that need. It allows us to connect to the wider world in a way that some people have figured out in our area. And for those that haven’t been able to make that work, it’ll help them make that connection that wasn’t there before. So, yeah, that’s the most rewarding part for me is knowing that we’re going to be able to meet that need and help people.

Jeff: Kristin.

Kristin: And for me, outside the inspiration that Jeff Shoenfeld from that CEO summit gives me, what’s really rewarding about the work is how we can make a difference and how we can uplift our youth, whether it’s through the robotics competition and seeing all these young high school students out there. We run a program here called a Global Trade & Logistics class where we invite high school kids to come in once a week after school and get trained from the professionals here at the port, whether it’s the general manager of Del Monte or a customs official, and they learn about career opportunities. And it’s just so rewarding to watch them feel the energy in this industry and then go on to explore it academically and then get jobs in this space. So that’s just really fun to make a difference there. And then even institutionally making a difference in my team players and watching them. Grow professionally and take on new challenges and help us fulfill our mission and our vision is very rewarding. So and then making a difference in our local community, because I didn’t mention this, but we’re actually governed by a body of five elected Harvard commissioners. And it’s their wisdom and insights and energy that helps us build all the programs that we run here. And they’re not about making a rich port. They’re about enriching our community and their constituents. And that’s really what’s in our DNA. And when we can make that difference. We can plug in ships so there’s not set on windows fills and those sorts of things, or we create more jobs. You know, our job base has grown from 10,000 jobs in the supply chain here in Hueneme to 24,000 jobs. That’s rewarding. That’s where it really matters. You’re doing good.

Jeff : Kristin and Shaun, thanks for being with us on the show. It was really fun to kind of hear more about how the Port of Hueneme is kind of leading the way and everything that you guys are doing from the high school students to the global maritime trade. You’re involved in the coordination to Shaun, you know, starting something brand new from an inland port and thinking about how you can benefit the lives of local farmers that maybe aren’t as mainstream as some of the bigger players and how you’re taking that to heart. It is fun to hear your insights as we contemplate the future of port innovation. Thanks for being with us.

Shaun: It’s a pleasure.

Kristin: Jeff, thanks for having us. And Shaun, I’m going to look you up. 

Shaun: That sounds perfect. I love it. I look forward to a visit out to Hueneme. Thank you.

Kristin: Sounds good. Look forward to it. Take care. Thank you, Jeff.

Jeff: The Future Of Podcast is brought to you by Fresh Consulting. To find out more about how we pair design and technology together to shape the future, visit us at freshconsulting.com. Make sure to search for The Future Of in Apple Podcasts, Spotify, Google Podcasts, or anywhere else podcasts are found. Make sure to click subscribe so you don’t miss any of our future episodes. And on behalf of our team here at Fresh, thank you for listening.