00:00I want to talk about a lot of things, including price pressures, including your port as a barometer
00:05of our economy, which is fascinating to talk to the likes of yourself or Gene Soroka,
00:10frequently more accurate anecdotal evidence than we ever get out of a data set. But I want to start
00:17with something that you're introducing. This is a new idea and the reason why you're in town here,
00:22I believe you just came from the Department of Transportation. That's correct. To talk about,
00:25as we look at the cost of diesel, jet fuel, the price that it costs to take goods from Asia
00:32to
00:32your port, there's a new idea as we look for alternatives and it's nuclear, small modular
00:38reactors on a boat. How close to reality is this? Well, we took the first step today. This
00:44memorandum of cooperation with the Maritime Administration is really the first of its
00:49kind. And what it does, Joe, is it establishes a framework for the proper agencies at the
00:55federal level to start having conversations with a port like ours, a major national asset
01:00and our partners in the private sector to look at ways to introduce SMR technology in a safe and
01:07reliable fashion. Look, you described it very well. Everything that's going on in the energy
01:11market. We, the cost of fuel and the uncertainty surrounding that is strengthening the case for
01:19energy diversification. Now is the right time for us to explore nuclear energy.
01:24We talk about these small reactors pretty frequently when it comes to data center, right?
01:30That's the future of AI, how you get them off the grid. You put a little reactor right there at
01:34the plant and everybody's happy. We've heard about the U.S. Navy for years, for generations, using
01:41nuclear in its aircraft carriers and submarines. Putting this on commercial vessels raises a lot
01:46of questions. Who's responsible for this? It's not a military operation any longer. What if a boat sinks?
01:51Could this be a target? How do you answer those questions?
01:54These are all great questions and they are questions that need to be asked and answered.
01:59And one of the reasons why we decided to join this memorandum of cooperation now is because there are a
02:06lot
02:06of questions that need to be answered. And safety is at the top of the list, right? When it comes
02:11to
02:11safety, there's no calendar. And so we thought it was important to start the conversation, bring in the
02:17agencies and the partners in the private sector, to start thinking through some of these scenarios.
02:22The reality is when you look at nuclear, it's a carbon-free energy source. It's already being used
02:30in different sectors, industries around the globe. What we're trying to answer through this MOC with
02:35Marat is how do we introduce it in a safe, reliable fashion? And let's not forget the Port of Long
02:40Beach is one of 18 commercial strategic seaports. So we're already an asset for the U.S. government in
02:47the event of any military activity. So it just makes perfect sense for us, a leading port, a major
02:52gateway, and a commercial strategic seaport to be the first port to enter into this type of cooperation.
02:58Well, it's interesting that it's coming from you, the port, not a commercial shipping line,
03:02not a ship builder. This is a pretty entrepreneurial move for you, is it not?
03:06Well, you know, the Port of Long Beach has been around for about 115 years. But in order for us
03:11to stay competitive, we have to think like a startup. That's exactly what we're doing. What
03:15got us here isn't going to get us there. And this is why in January, I launched our new 2050
03:19vision.
03:19And our plan, Joe, is very simple. We want to double our container throughput to 10 million to 20 million
03:24container units and build a port of the future in the process, a port that's going to be clean.
03:29And we're also leveraging partnerships. For example, BlueCore, which is a startup that just entered into a
03:35lease with the Port of Long Beach, they're the ones who are doing the R&D behind this technology.
03:40And they're the ones who are going to be working with the port, with MARAD, and the other federal
03:44agencies to make sure that we do this reliably and safely.
03:48When you look around the world right now and consider what's happening in the Strait of Hormuz,
03:52what might be happening in the Red Sea, it raises so many questions about technology like this.
03:56Could you take a nuclear-powered ship through the strait?
04:00Well, it's a great question. I wouldn't do that right now. But when you consider the advantages
04:05of what this energy source offers, it's worth exploring. That's what this MOC is all about.
04:11It's asking those questions, bringing in the experts, bringing in the agencies, making sure
04:16that it's introduced in a safe and reliable fashion.
04:19I want to hear where this goes. I think our audience will be fascinated to learn as well.
04:22There are massive economic implications here, just like the ones we're dealing with now.
04:27The reason we're having this conversation as we started out is because of the price pressures
04:31that we're feeling from overseas. And I'm wondering to what extent, if any, that is impacting
04:35business in terms of traffic at the port and just the conversations you're having with shippers
04:41right now who are enduring this.
04:43Well, it's interesting. The impact is felt. And it's felt first at the pump. But it cascades across
04:49the transportation network because so much of the cost involved in transporting goods
04:54from port to port. And once it arrives at destination from endpoint to endpoint, it requires
05:01that fuel. But surprisingly, Joe, the resilience of the American consumer, the resilience of
05:07the supply chain. Here we are in the middle of the soaring fuel costs. And yet at the Port
05:13of Long Beach, we're ahead of a record run last year. Through the first half of 2026, we're
05:18actually two percentage points ahead of last year. And last year was a record year for us.
05:22And a lot of it is because shippers are trying to hedge their bets. They're trying to mitigate
05:27the uncertainty of additional tariffs or additional soaring fuel costs. And they're advancing their
05:33shipments. And like you said a moment ago, traditionally, ports like cars have been pretty
05:37good barometers of what's going to happen to the rest across the economy in the months
05:42ahead.
05:42Well, that's encouraging considering new tariffs are coming. And this is the time when the
05:48holiday season is set, right? What happens in July and August will pay off in November
05:54and December. What kind of a holiday season will we have based on the currents that you're
05:58seeing now?
05:59We've already begun to see holiday gifts arrive into our port.
06:04Isn't that something?
06:04It's, I mean, we're not going to miss the season.
06:08Yeah.
06:08In past years, there was concern of whether or not folks were going to have access to the
06:12hottest toys. They're already here.
06:13And that's the remarkable thing about these, you know, whether it's fuel costs or whether
06:20it's some of the uncertainty surrounding trade policy, it's enticed everyone to advance their
06:25shipments.
06:26That's really encouraging, I think, for a lot of people who are listening right now. Talk
06:29to me about the other end of things. When you have trucks lining up and they're paying
06:32over $5 a gallon for diesel, does that impact business or are these businesses swallowing that
06:39cost right now or are they passing it on?
06:40It's a mix. Most businesses absorb some of it, pass on to some of the consumers.
06:45Look at the transportation like J.B. Hunt. I mean, these stocks are at all-time highs.
06:48They're printing money, it looks like.
06:50Well, they are, but affordability continues to be a key issue, not just for policymakers,
06:54but for operators like us. And it's important for us to keep an eye on that because at a
06:59certain point, that resilience, that resilience muscle is not going to be able to stretch to
07:04that degree. So this is why, again, I say what is happening right now in the energy market
07:08is strengthening the case for energy diversification. This is why this historic
07:13memorandum of cooperation with the Maritime Administration makes a ton of sense.
07:17How's your labor force in terms of the port itself and drivers? This was a real concern
07:22coming out of COVID. How do we get enough drivers, even if the goods make it to port,
07:26to get them around the country?
07:27Our workforce are the true heroes. They're the ones who move the containers. They're the
07:31ones who power our port. And right now, we have a very healthy and robust workforce.
07:35They show up. During COVID, they masked up. And we never had to close a single shift.
07:42So it's a testament to the resilience of our workforce as well.
07:45What's the timeline, getting back to where we started, on small nuclear reactors getting
07:50on ships? Do you have one or is it impossible to tell right now? Is this five years, ten years
07:54away?
07:54You know, I can't tell you exactly when it's going to happen. But what I can tell you
07:58is this MOC sets the path forward for us to have those conversations that need to be
08:03had. We have willing partners in the private sector who are going through the R&D right
08:08now. We're bringing in the experts. And again, we're going to do this safely and reliably.
08:13Is this administration the reason why this is happening now?
08:16You know, there seems to have been an embrace of nuclear that didn't exist before.
08:20SMR has been around for the last 10 years. Nuclear power has been around, as you mentioned,
08:25the U.S. Navy. As a matter of fact, a fun fact, the very first Warcraft vessel to use nuclear
08:32power was the USS Long Beach back in the 1960s. Is that right?
08:35Yes, it's been around for a while. But again, it's the application and the adoption. If we
08:40can introduce this technology in a safe and reliable fashion, I think there will be a
08:44lot of advantages.
08:45Would this be like an aircraft carrier or a submarine where you'd have, in this case,
08:50Maersk would put a cargo vessel on the water and be out there for a year?
08:53Well, right now, our partner, Blue Corps, is looking at how we could leverage SMR to power
08:58commercial vessels. That's the beginning phase. Where it goes from there will depend largely
09:03on how we develop the safety protocols, the operational standards, and make sure that this
09:09technology is adopted and implemented safely and reliably.
Comments