Port consultants find in-house cruise terminal model cost-effective; ILWU raises manning and jurisdiction concerns

Port consultants from Vermeil Aujamille presented a commercial analysis of management options for the new James R. Herman Cruise Terminal and recommended careful negotiation of operating agreements and KPIs to capture revenue while ensuring operational quality.

Louis Ajamil said the cruise industry is growing and that the terminal's business model must balance attracting lines with producing strong net revenue for the port. Summarizing his review of other ports, Ajamil told commissioners that San Francisco—urrently sits near the median in per-passenger port charges and that the port's existing in-house operations "is the least expensive model to operate internally," producing efficient operating costs that can favorably net to the port if the commercial terms are structured correctly.

The public-comment period included several speakers from the International Longshore & Warehouse Union (ILWU) Local 34 who raised concerns about the "manning clause" and details in Metro's business plan. David Hill, Vice President, said elements of Metro's supporting documents contain factual errors about which locals would fill specific positions and asked Metro to honor prior commitments to Local 34 jurisdiction. Rene DeCruw, ILWU labor relations chair, asked staff to correct references to job classifications and reiterated that Local 34 expects to perform the work assigned under prior commitments.

Commissioners responded by thanking presenters and labor representatives, noting staff will continue negotiations with the operator and labor to resolve outstanding issues. Port staff emphasized the presentation was informational and that final contractual and operating decisions will be reached through the negotiation process with Metro and with input from labor.