The Los Angeles harbor commission has OK’d a $2.7 billion spending plan for the Port of LA’s 2025-26 fiscal year, which officials say will prioritize ongoing investments in workforce development, business, community and sustainability.

The five-member Los Angeles harbor commission approved the budget on Thursday, June 12, representing a $82.5 million, or 3.1%, increase compared to the current fiscal year. Harbor commission President Lucille Roybal-Allard described it as “prudent” and “well-balanced.”

“We are confident that our careful financial planning and fiscal management over the past decade positions us well for sustained forward progress,” Roybal-Allard said during the harbor commission meeting.

Jeff Strafford, the port’s chief financial officer, gave a recap of the budget.

Cargo volume in the coming fiscal year, which begins July 1, is expected to reach 8.2 million twenty-foot equivalent units, Strafford said, representing a decrease of approximately 9.9% compared to the previous year’s adopted budget. TEU is the standard cargo measurement for ports.

The reduction in cargo volume is likely to cause a $56 million decrease in revenue. Earlier projections placed revenue at about $713 million, now down to $658 million.

A slowdown in cargo movement and trade is expected as a result of federal trade policies and tariffs.

President Donald Trump in April enacted his long-promised “reciprocal” tariffs — placing a 10% baseline tax on imports and other higher rates for U.S. trading partners that run so-called trade surpluses. China has faced much higher tariffs, up to 145%, prompting Chinese officials to threaten a 125% tariff on U.S. goods.

Amid a 90-day agreement, however, the U.S. and China have lowered tariffs — while they negotiated an overall deal. The two economic superpowers reached a truce after talks in London this week, according to reports on Thursday.

“We are getting a total of 55% tariffs, China is getting 10%,” Trump wrote on his social media site, Truth Social, on Wednesday. More details on the deal are expected to be announced in the future.

Still, the port is expected to reduce overall work related to the transportation of containers, which means fewer trucks and ships, Strafford said. Operating expenses, meanwhile, are set to increase in part because of salaries and benefits, and a potential proposal to reduce vacancies. The port may take in transfers from the city workforce — a move intended to further reduce layoffs as Los Angeles addresses a roughly $1 billion deficit.

The 2025-26 budget forecasted operating revenues at $657.6 million, of which about $470.3 million is expected to generated by shipping services at the port. Operating expenses are estimated at $427.1 million.

The budget will also allocate $231.3 million to a robust capital improvement program. This amount is a decrease of $18.1 million — or about 7.2% — compared to the 2024-25 spending plan.

The port will also provide money to support major terminal and transportation construction for the following projects:

• $47.6 million toward the $130 million State Route 47/Vincent Thomas Bridge and Front Street/Harbor Boulevard Interchange Reconfiguration Project.
• $26.3 million to support the total $73.8 million Berths 302-305 On-Dock Rail Expansion.
• $24.4 million for two Marine Oil Terminal Engineering and Maintenance Standards projects at Berths 238-239 and Berths 167-169.

The port will also invest about $23.2 million for public access and environmental enhancement projects. Of that amount, about $2.8 million will support the $76.6 million Wilmington Waterfront Avalon Pedestrian Bridge and Promenade Gateway Project, as well as allocate $8.6 million toward the $501 million Zero Emissions Port Electrification & Operations project.

“We come into this budget in a strong position, with nine consecutive years of positive cash flow,” Gene Seroka, the port’s executive director, said in a statement. “Yet in the face of global trade and economic uncertainties, it’s more important than ever to navigate with a steady hand, remaining focused on our planning and priorities.”

Some of the additional money coming to the port, about $68 million, is from federal, state and local grants or from some direct reimbursements from port tenants, Strafford said.

“This is a year where we’re going to kind of see how things play out,” Strafford said, “so we could really assess what the long term is going to be looking like.”