California is home to the fourth-largest economy in the world, with a GDP of more than $4 trillion ranked only behind the United States itself, China and Germany.
The Golden State includes dozens of business sectors from manufacturing to agriculture and technology, and also handles billions of dollars worth of international trade every year.
Much of that product travels across the ocean, and passes through one of California’s ports.
But these trade patterns have been impacted by trade wars — and actual wars — which have led to increased consumer costs, fuel prices and route disruptions.
Dr. Noel Hacegaba is the President of the California Association of Port Authorities (CAPA), which represents 11 ports across the state, and the CEO of the Port of Long Beach. He spoke with Insight Host Vicki Gonzalez about how ports are navigating conditions to keep the wheels of commerce turning.
This interview has been edited for length and clarity.
Interview highlights
Has California always been a center of commercial shipping? Has that grown over time?
It has. If you look at California, and its proximity to Asia, it's the perfect gateway for trans-Pacific trade. In fact the vast majority of goods that enter the U.S. through California ports come from Asia. It's just the right place and offers so many advantages.
Over the decades California has become a juggernaut for global trade. When you take California's ports which range from Humboldt Bay in the north all the way to San Diego in the south, you've got a wide array of different entry points. Each port offers different advantages; there are some that specialize in containerized ports like the Port of Long Beach, and then there are others that specialize in break-bulk, lumber, autos.
We have ports in our area — West Sacramento and Stockton, and then Oakland and Richmond a little farther out. What are the specialities of these facilities closer to home?
The ports that you just mentioned are important because when you consider the Central Valley in California, which is a major producer of agricultural product [that] is in high demand in places like Asia, those ports play a pivotal role in helping to get that product out.
Let's remember that exports are a major source of economic activity here in California and the United States. This is one of the reasons why California is the world's fourth-largest economy. It's because of its ports. and all the opportunities that they offer.
What kind of economic impact do the Golden State’s ports have?
When you take all the ports together you're looking at about 40% of the nation's waterborne imports, [and] about 30% of the nation's exports. We estimate that about a quarter of California's GDP is supported by California's ports, and you're talking about millions of jobs. Just to give you an example, the Port of Long Beach alone supports over a million jobs in California, almost three million jobs across the nation. That's about $300 billion worth of goods annually.
Does California have significant international competition?
When you look at some of the gateways to move product from Asia to North America, you do see Canadian ports investing aggressively in their infrastructure. Over the last three decades we have noticed rail connectivity between Canadian ports and destinations here in the United States. Mexico as well has invested billions of dollars in their infrastructure. This is why it's so important for our policymakers in Sacramento to remember how important ports are.
The historic Port and Freight Infrastructure Program that the Newsom administration, with California legislature support, authorized a couple of years ago — $1.2 billion — that was huge. We hope it's not a one-and-done deal. We hope that in the future California will continue to invest in its ports because when it does, it invests in its own economy.
Shipping is also impacted by major events. Going back to COVID-19, I remember the major shipping backlogs. Has that traffic recovered since the pandemic?
The pandemic was a crisis that we had never seen. There was no playbook. Our dock workers [and] longshore workers, they masked up [and] showed up. We never had to shut down a single shift at the ports of LA and Long Beach. It's a testament to resilience.
[During] the supply chain crisis, at the peak, there were 109 ships that were waiting to access the berths in San Pedro Bay. We cleared all that backlog. Today, because of what we learned and because we developed what I call the “resilience muscle,” we're handling more cargo today than we did at the peak of the pandemic with no backlogs, congestion or delays.
It's been six months since the war with Iran started. How has that impacted our ports?
We're seeing it in different ways. We are in a very different trade lane, so most of our trade is with Asia. Having said that, when you look at the impact on the energy market globally, you feel it because the nation's transportation sector is not immune. Fuel costs have surged since the beginning of the conflict. And when you consider that, that introduces a new cost that cascades across the supply chain.
From a volume standpoint, containers, we've noticed that many shippers, because of the uncertainty geopolitically, conflict, but also trade disruptions as a result of new tariffs and trade policy, they've employed a strategy that we call in the industry “frontloading” where they advance their shipments. It's a strategy where they try to get ahead of new tariffs [and] surging fuel costs. As a result of that we've actually seen an increase in our cargo volumes. In 2025 the Port of Long Beach set an all-time record, we handled 9.9 million TEUs [Twenty-Foot Equivalent Units]. For the first half of 2026 we're actually ahead of where we were last year.
Two weeks ago the Trump administration set a new round of international tariffs on dozens of countries that the U.S. trades with. How has the past year and a half been when focusing on the impacts that tariffs have had on ports?
It certainly has been a source of disruption. The unpredictability has introduced an element of uncertainty in the supply chain that has made business planning, decision making and investment decisions a little more challenging. As a result, there have been a lot of surcharges that have been introduced into the national transportation system.
But again, our ports here in California have demonstrated our ability to be a safe harbor in the sea of uncertainty. When you consider what's happening in the Middle East, what has emanated from that, the shock to the energy market and the resulting fuel costs, and when you consider where we are today from a trade policy standpoint, these 10% temporary tariffs were effectively replaced by another tariff in that same category. The American consumer continues to buy, the American supply chain continues to process all those containers and all that cargo, and it's a testament to that resilience muscle that we all developed during the pandemic.
There’s concern and criticism of the emissions that come from California's port facilities, especially air pollution. What kind of changes have been made to help clean things up?
Many. In fact California sports are the cleanest ports on the planet. At the ports of Long Beach and Los Angeles, guided by our Cleaner Action Plan, we have managed to reduce every category of emission to the tune of 98%. This has happened during the same time period that we saw our cargo volumes increase by over 40%.
At the Port of Long Beach, I just launched a new vision for our port in January. We call it the 2050 vision. We're planning to double our container throughput to 20 million TEUs by 2050, and we're building the port of the future in the process. The port of the future is going to be faster, cleaner, more resilient, [and] safer.
California also has a goal to have all new cars and light trucks be zero emission by 2035. Do these ambitious climate goals conflict with how a port needs to operate?
There's no conflict at all. We aspire to become a zero-emission port much sooner than 2050. If the technology were available, if the financial resources were available, I think we can get there much faster. The 2050 goal has to do with the cargo throughput and cargo volumes. But when you look at California’s ports we’re all chasing the same goal. We're all trying to become more efficient, more competitive, safer, more secure, and cleaner as well.
At the end of the day, does this mean ports need to go electric? Or are there other sources of clean power?
When you look at how we're leading the transition to carbon-free energy sources, in Long Beach for example, most of that transition is electric. That's the low-hanging fruit. But we're also exploring offshore wind. We're still looking at electric microgrids. We're looking at hydrogen fuel stations. We just announced the $1 million methanol challenge where we're encouraging the shipping industry to adopt methanol bunkering within our port.
And then just a couple of weeks ago I was in Washington D.C. signing a first-of-its-kind memorandum of cooperation with the U.S. Maritime Administration to explore the adoption of a small nuclear reactor within the port environment. These small modular reactors are the latest form of carbon-free energy that we think could have potential application in the maritime environment.
A new bill, AB 1777, aimed to hold ports, warehouses, and other places accountable for their pollution by authorizing the California Air Resources Board to adopt regulations to reduce or mitigate emissions from indirect sources of pollution. Your association was against AB 1777. Why?
We have demonstrated an ability to move the needle when it comes to decarbonization and reducing emissions on a voluntary basis. There is a role and a place for regulation. Directionally, there is alignment between where the regulations are headed, where we as ports want to head. But when you look at the practice, the implementation, the adoption, it requires a whole constellation of factors to get us there and get us there faster. We're talking about a system of systems that comprises different industries and sectors that each require investments [and] equipment.
What we have learned in Long Beach is cooperation is what will get us there faster. The groundbreaking Green Port Policy that launched back in 2005, that evolved into the Cleaner Action Plan between the San Pedro Bay ports. We have demonstrated that you can grow green; you can grow your volumes and you can reduce emissions. We did that voluntarily.
It's when we collaborate, it's when we offer incentives, it's when we learn to support each other across different industries and sectors that we can get there faster.
There's also a big push to revitalize shipbuilding in the country, from Congress as well as plans by the controversial group California Forever in Solano County. Are the state’s ports supportive of these efforts?
When you look at the economic engine that is California’s ports, anything that will spur more economic activity, create more good-paying jobs, we support. When you look at what's happening in the world, the disruptions brought on by geopolitical instability, it just makes sense for there to be energy diversification, energy independence… and the same applies to all the equipment that we need to run these ports, whether they’re cranes or ships.
But the key is we have to have a transition plan. It can't happen overnight. And I think the stars may be aligning so that some of that manufacturing can come back to the U.S. We'd love to host it here in California. I think it's a perfect place to have U.S. shipbuilding and crane manufacturing. We welcome that opportunity.