In Brief:
- Kristi McKenney was named executive director of the Port of Oakland in February, the first woman to hold the post.
- Like other ports, Oakland has seen fluctuations in cargo volumes as the Trump administration has rolled out its tariff policies.
- The port’s board has also recently approved a name change for the Oakland Airport.
Earlier this month, the Oakland Airport announced it would be changing its name to the Oakland San Francisco Bay Airport. The reason is fairly simple, according to Kristi McKenney, the new director of the Port of Oakland: Travelers should know where it is. While residents of the American West are relatively well-acquainted with the geography of California, many others don’t know about Oakland’s proximity to the bay, to the Napa Valley wine country and other points of interest.
“I’ve had people tell me they thought it was closer to L.A.,” McKenney says. “It’s purely a geographic identifier.”
McKenney was named executive director of the Port of Oakland in February, after five years as the port’s chief operating officer. There’s a lot more to the job than renaming the airport. The Port of Oakland is the ninth busiest container port in the U.S., with a relatively even split between exports and imports. (The U.S., on the whole, imports significantly more than it exports.)
The port saw nearly a 15 percent drop in cargo volumes in March as the Trump administration’s new approach to tariffs began to take effect. It also controls about 20 miles of waterfront land, including lots of commercial real estate, and acts as a public energy utility.
McKenney, a Bay Area native, joined the Port of Oakland as an environmental planner in 1994, after earning a master’s degree in civil engineering and transportation engineering at the University of California, Berkeley, and working as a consultant for public-sector clients. She recently spoke with Governing about the port’s business operations, climate goals and relationships with local communities. The interview has been edited for length and clarity.
Governing: You’re new in this role at a time when a lot of people are watching ports for indications of where the global economy is heading. Can you tell me what your job entails and what it takes to operate a port day to day?
Kristi McKenney: It’s a lot more than a seaport. The Port of Oakland is a little bit unique. We have in our portfolio a major seaport, mostly a container port. We have a major airport. We also have a significant amount of commercial real estate. We’re really the waterfront agency for Oakland. While we don’t necessarily own all of that real estate, we do own significant portions of it and we’re the land-use authority over more of it. And we’re also a publicly owned utility for electricity, which is very unusual. Being the executive director over all that is incredibly dynamic and exciting and means my day is filled from a variety of different business lines.
I saw a report that cargo volumes were down 15 percent in March. People are somewhat more attuned than usual to the activity at container ports. Can you tell me what you’ve been experiencing in terms of container volumes?
Every port is a little bit different. We are 50 percent import and 50 percent export, approximately. It varies quarter to quarter. We’re America’s largest refrigerated export port. We’re also primarily a second port of call due to the nature of the West Coast trade routes. You have the very large ports in San Pedro Bay — Los Angeles and Long Beach, which are typically the No. 1 and 2 ports in the country in any given year. It’s most common that ships will call there and then call Oakland as a second port of call, because it’s actually pretty far west of Southern California, and then head back to Asia or wherever their destination might be.
That’s one of the reasons why a lot of refrigerated cargo wants to come through, because that’s cargo that you’re keeping fresh or frozen and it has more of a clock on it in terms of the value of the commodity getting to its destination on time.
One of our bigger commodities that we ship out of here refrigerated and frozen is protein. A lot of that comes from the Midwest. It’s a very interesting and diverse mix of commodities coming in and out, which gives us, in a way, a little bit more resiliency. We’re not 100 percent dependent or even 70 percent dependent on imports from China, like some other ports might be. That means that if you’ve got one country with a lot of tariffs, that may impact us a little bit less because of that diversity and because of the exports.
For us, when the big tariffs were announced, of course we were very active in making sure the government understood the potential impacts to the economy as a whole. We worked with our partners, especially the agricultural community which does a lot of exports out of the U.S., to make sure there was a good understanding in Congress and the White House around some of the decisions they were making. Some of those are water under the bridge. We were successful, for example, at limiting the proposed port fee. It was going to apply to every port a ship called to in a single trip. And now it only applies once for the trip. That was very important, so that’s a success story. That would have been a terrible impact on most of the ports in the country.
Then you look at the tariffs that have been implemented, and we did see a downturn. We were growing significantly coming out of some COVID-19 challenges. We were on an upswing. And the initial tariffs did give us a small haircut, briefly, but then we’ve bounced back. We’re looking at growth this last month. Of course now we have some new [tariff] announcements, so we have yet to see. But so far I think because of the mix of commodities, the mix of import and export, the nature of our business, it’s been buffered. There’s absolutely been an impact, but so far it hasn’t been as dramatic as it’s been at some other ports.
Do you feel like you have a line to the decision-makers on those issues?
It’s really about coalition building. We have that. The seaport world is very much a partnership business. Logistics chains are long and deep, and it takes everybody in that chain to deliver a good from a factory or a farm to a table or an office. It’s really about building those coalitions and showing the overall impact to the economy. There has been some success with that model.
There’s been a recent name change to the Oakland Airport. Why change the name?
Port of Oakland
This surprises some people, but even though Oakland is, of course, a famous city — it’s well-known, it has a rich history, I think it was just voted by Conde Nast the No. 1 food city in the country and all these other great things about Oakland — that doesn’t mean if you’re from thousands of miles away you know exactly where it is. I’ve had people tell me they thought it was closer to L.A. It’s purely a geographic identifier to tell people if you’re going to Napa, if you’re going to Santa Cruz, if you’re going to visit your cousin in Livermore, Oakland Airport might be more convenient. Looking at who buys tickets, you get a much higher percentage of people from west of Denver if they’re coming to the Bay Area purchasing a ticket in and out of Oakland. Once you start getting east of Denver, you see fewer and fewer people who are going to those same destinations picking Oakland, because they just don’t know what it is.
Can you tell me about the electric utility aspect of this operation?
There are many POUs, which is a term for publicly owned utilities, in California, and that’s in contrast to the IOUs — investor-owned utilities like PG&E or Southern California Edison. These POUs may have some small generation that they own, but basically they’re paying for transmission over the state grid, and ultimately it’s an IOU line that’s delivering the power, but the POU is buying it and responsible for resourcing it. The POU is buying it and selling it. We own portions of solar farms in southern California. We own hydro here. We own some geothermal up in Northern California. We’re buying our power and we’re transmitting it over the grid, then receiving it, and selling and delivering it to our customers in the airport and the seaport. This gives us a lot of advantages because we’re able to control our mix of power, and lean into renewable resources and zero-carbon resources.
We’re also able to offer our tenants a lower rate for their electricity use. And there’s never been a time when that’s more important because we are also partnering with our tenants very closely to move them into zero-emission equipment. Transportation has a lot of emissions, especially in urban areas that may not have other types of emissions, and we are on a very dedicated path and using lots of resources and generating lots of funding, whether it’s our own, our tenants’ or through grants, to move all of this big equipment that operates at airports and seaports to zero-emissions. That will require a lot of electricity.
It sounds like you’re exposed in any number of ways to the vagaries of federal policy, on energy or on tariffs or other areas. What’s that like in terms of anticipating the future?
[Laughs] It’s exciting! There are a lot of balls in the air at any one time. We have a whole commercial real estate portfolio, and urban-area real estate is going through its own challenges across the country and especially in California. We have other interesting challenges, some that are macro-level issues we don’t have direct control over. What we focus on is what is in our control to actually implement and what is in our control to influence.
We work very hard every day to build coalitions, build partnerships, so that we have influence beyond our direct control. That’s essential to being in these diverse business lines, because on any given day, many different policies and regulations at a local, state or federal level could impact any one of our business lines. We have to constantly be on top of that. We have a fantastic Government Affairs Division that stays on their toes and keeps abreast of everything happening. We need to have that relationship with the regulators and legislators so that when we say, “We need this and here’s why and here’s why it’s good for the community,” that they take up those actions.
I assume the zero-emissions shift is also a response to community concerns about environmental impacts at the local level.
Absolutely. Yes, it’s about climate change. It’s about doing our part. When you’re a waterfront community, it’s pretty hard to deny that — and hopefully other communities are realizing that too. But it is also about local emissions. My great-grandparents lived on 8th Street in West Oakland, a stone’s throw from the seaport in 1910, because my great-grandfather worked at the railroad and everybody had to walk to work in those days. You can only imagine the emissions they were breathing in 1910 of a variety of not just burning fuels but all kinds of chemicals. There was no zoning like we know it today, where houses are over here and factories over there and warehouses over there.
Frontline communities near industry have been impacted for a century and a half. It’s our commitment to do well by doing good, to do well for the community with jobs and economic activity, to support businesses that produce that economic activity and jobs, while making sure we’re doing good by making those businesses as low impact as possible in every environmental category.
