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John Carver, an industry expert in international logistics solutions, recently joined Jones Lang LaSalle as executive vice president specializing in ports, airports and multimodal services. He leads a four-member team in the company’s downtown Los Angeles offices as part of its Supply Chain & Logistics Solutions division. The team focuses on connecting JLL clients with foreign port, manufacturing and logistics locations, with a particular emphasis on the China-Los Angeles axis. In an exclusive interview with GlobeSt.com, Carver discusses issues facing both public agencies and private property owners as a result of the current downturn in global trade.

GlobeSt.com: Given the sharp decline in imports, what are landlords doing to deal with the downturn in demand?

Carver: With limited new transactional activity, landlords are instead placing greater emphasis on tenant retention and keeping existing portfolios stable. Nearly all are involved in negotiating early extensions with their stronger tenants, often in exchange for improved commercial terms. This in large part is being undertaken to better position themselves in anticipation of a future easing in the credit markets.

GlobeSt.com: How is Jones Lang LaSalle helping its landlord clients use this fallow period to better prepare for the future?

Carver: This climate presents an opportune time for land owners to work on long lead time due diligence, entitlements and environmental matters in order to ready their land for future development or disposition. Jones Lang LaSalle’s integrated service platform in the areas of capital markets, property development services, portfolio administration, valuation research and environmental sustainability are actively assisting our clients in this capacity.

GlobeSt.com: What should owners be asking of local authorities both to get through the current crisis and prepare for future changes?

Carver: New opportunities will spring from increased collaboration between public and private business interests. Real estate owners and developers will benefit from becoming involved in stakeholder dialog with municipalities, local transportation authorities, port administrations and other agencies, as new infrastructure projects are studied and set into motion. Many of these projects will have real estate elements that will provide upstream opportunity for new ideas and investment.

GlobeSt.com: What kind of port and logistics-related infrastructure improvements do you think the federal government should make or contribute to?

Carver: Nearly every seaport and airport has its own list of critical infrastructure projects deemed necessary for renewed growth. The vast majority of projects tend to target improved connectivity between modes of transportation. Examples include new or expanded on-dock rail at ports, improved separation between large and small aircraft at airports and safer interaction between passenger cars and truck traffic.

GlobeSt.com: Most major US ports have projects planned or in progress to deal with increased shipments from Asia that now look like they may not occur, at least not in the anticipated time frame. What should ports be doing?

Carver: While port activity is down on average 30% on the West Coast and 20% on the East Coast, ports must be diligent about preparing for the future. Port planners must look as far out as 20 years, given the scale involved in the designing, engineering, and building of major port infrastructure projects. So despite the current slowdown, port officials need to continue with their long term master planning. Also, we would hope that ports will advance their commitment to environmental consciousness, which has begun to show measurable effects, and has in itself helped to create new jobs and improved standards of operation.

GlobeSt.com: Improvements planned for East Coast ports like Jacksonville and Savannah appear to threaten the growth of West Coast ports, particularly Los Angeles and Long Beach. Do you see them being able to cooperate rather than compete?

Carver: When cargo volumes resume their stabilized levels, we expect to see both West Coast and East Coast ports right back where they were a few years ago. In general, cargo traffic has not been a zero-sum game, where one port benefits at the expense of another. The competition has been more about capturing the proportionate share of new traffic created by increased demand. In that respect, we do expect to see internal competition among East Coast ports as they vie to be a port-of-call for the all water routes through the Panama Canal, and from rising Pan-American and Trans-Atlantic trade. As for the West Coast harbors, we expect they will long be a viable, if not a preferred, port option for the majority of shipping interests.

GlobeSt.com: Intermodal is often touted as the trend of the future, but the long-route trucking industry seems intent on downplaying, and even undermining, the rail aspect of intermodal growth. Do you see intermodal growing as quickly and as large as its supporters think it will? Do you see the trucking and rail industries coming together on this?

Carver: I believe that the future of the railroads is on sold ground. With the volatility of fuel prices spiking as we saw last year, the increasing sensitivity to environmental factors and the overall reliability of rail transportation, the importance of rail to the supply chain grid is undeniable. It is true, however, that rail and road interests need to find ways to work together in the same fashion that the ports and ocean carriers have been able to do. Together, ports and ocean carriers have created efficiencies of operation that demonstrate an understanding and respect for their interdependency.

GlobeSt.com: In regard to Lingang, what are its prospects given the current climat

Carver: Lingang represents the single largest industrial project in China today, over 50,000 acres designed to support the new Port of Shanghai at Yangshan Harbor. While China has not escaped the challenges presented by the global economic downturn, the Chinese government has designated that infrastructure will be a key component to their own stimulus plan. This continues to place great emphasis on projects like Lingang and the desire to attract quality multi-national companies to invest. Unlike the US, where consumer spending is down, China is creating the conditions for a growing middle class, and with that, opportunities for new and expanded foreign direct investment. Lingang has been fortunate to be viewed by companies seeking entry into the China markets as a safe and strategic entry point.

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