5-1 Final Project Milestone Two: Success Factors, Risk, and Projections
Southern New Hampshire University (MBA 520 Module 5)
Port Terminals (Ports America)
Table of Content
SUCCESS FACTORS AND RISK4
REFERENCES & CITATIONS9
After evaluating the Port of Los Angeles financial health the port has a strategic plan for its future. The Port plans to work on its infrastructure with the city of Los Angeles in an effort to fix trucker traffic on the highways. The Port also plans to modify their position in the market because they see the change with an evolving future with the super ships that have already started coming to and from Asia. With the super ships of the future it allows travel to and from Asia less frequent trips, burning less fuel, and the commodity of goods on the container ship will almost double. The risks and challenges the Port terminals face is competitive to stay current with the demand of their berthing docks having the capabilities of accepting such large vessels. Most Port Terminals have already started modifying their cranes to raise them an additional 25-30 feet to accommodate the mega ships.
Additional projects the Los Angeles Port faces are health for the environmental clean air act. The Port will need to adjust their berths by modifying the docks to allow for the green ships to plug into their terminals. When a vessel comes along side the dock they will extend high voltage lines down to be plugged in at the dock allowing for clean energy over the past diesel engines running while sitting for days at the dock. The surrounding cities (San Pedro and Long Beach) had problems with poor air quality.
Lastly the big-ticket item is Ports terminals to start going automated. Automation modifications to the Port Terminals means large construction of a terminal yard with adding in mostly electric cranes and tractors for moving cargo. Moreover the problem with this is trying to keep business running wile demoing the terminal yard. The risk is large for business, very costly but the return on investment will be in a 10-15 year window. At which point cost of labor is very low as most all equipment will be ran automatically.
Success Factors and Risks
Priorities for future Performance
The Port of Los Angeles Terminal organizations must stay current in an evolving market to stay competitive so shipping companies whom will contract with said terminals to use their cranes. Decisions will need to be made to mange financials to support projects to break ground as soon as the demand is there. The Port terminals should be proactive in their approach prior to such demand so they’re ready for the change.
The risk that might affect the Los Angeles Port Terminals business success would be falling behind the demand by being reactive to the market as it already approaches. The Terminal management will need to get their intrepreneurs working on projects as soon as possible to start planning, funding, and breaking ground.
The Port of Los Angeles approach to risk is to stay competitive and work with the customers and shipping companys to project what the market demand will be and where the Port will need to be now, in short term, and or long term. The terminals intrepreneurs will use the plans molded with current financial data, current and future demand to forecast when plans can become reality to support the future short term or long-term demand. The Terminals will need to spend money up front to reap the reward either short term or long term.
The Port terminals may capitalize on non-financial factors to better gain market share, reputation, and modifying the terminal by developing a plan using past practices, past data, customer relationships, and the shipping company business by holding weekly or monthly meetings to discuss how the short term and long terms goals for market demand will help the future of business using the statistical financial data.
The most significant risks facing the Port of Los Angles is the technology adjustment of our terminals going automated. The company in essence will be spending a lot of money, having a huge disruption to business during the initial construction phase, and lastly the relationships the Port faces with its ever so strong union labor force “the longshore men”. Short term and long term factors are that the demand for unionized labor to operate equipment diminishes now with automated equipment that runs itself and works off information technology.
Consolidated financial performance
Financial Performance for the Port of Los Angeles current assets exceeded current liabilities by $348.1 million. Capital assets, net of accumulated depreciation of $1.7 billion amounted to $3.9 billion. Total assets and deferred outflows of resources exceeded total liabilities and deferred Inflows of resources by $3.1 billion. Bonded debt net of unamortized discounts/premiums of $58.7 million, totaled $1.1 billion. Operating revenue amounted to $446.9 million. Net operating expenses excluding depreciation of $137.4 million amounted to $234.2 million. Capital grants amounted to $111.9 million. Given the graphs below showing the data the future looks bright for commodity growth. Forecasting financial performance below is a spreadsheet showing a forecast for the Port future.
Updated Base Growth/Base Share Forecasts
Financial Performance and Forecast
Best- and worst-case Scenario
My analysis of the data is only a forecast but given past data the worst case scenario shows a moderate increase in most categories that reflect a little spike in cost from the past three years.
My assumption, forecasting methodology led me to believe the forecast of projects will change the Ports Market and the Terminals will need to stay current to meet the demand of market change. Given the statistical data and the graph chart below shows the future projects the Port has projected for its future growth.
REFERENCES & CITATIONS
- Https://www.portoflosangeles.org/finance/financial_statements.asp. (n.d.).
- (n.d.). Retrieved from • Journal of Commerce (1542-3867). 2/8/2016, Vol. 17 Issue 3, p18-20. 2p.
- Transportation Research: Part E. Jul2016, Vol. 91, p274-289. 16p. (n.d.). Retrieved from • Transportation Research: Part E. Jul2016, Vol. 91, p274-289. 16p.
- https://www.portsamerica.com/about.html. (n.d.). Retrieved from • https://www.portsamerica.com/about.html
- privcapid=4771728. (n.d.). Retrieved from • http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=4771728
- Journal of Commerce (1542-3867). 4/30/2012, Vol. 13 Issue 16, p10-14. 4p.
Click following link to download this document
5 1 Final Project Milestone Two Success Factors Risk and Projections.docx