Port of Los Angeles (POLA) — Financial Profile
Harbor Department of the City of Los Angeles
#1 Container Port in the Western Hemisphere — Revenue Bond Credit Analysis
Prepared by DWU AI
An AI Product of DWU Consulting LLC
February 2026
DWU Consulting LLC provides specialized municipal finance consulting for transportation agencies, airports, ports, toll roads, and water utilities. Our infrastructure finance expertise spans revenue forecasting, bond structuring, rate analysis, and capital program advisory. Please visit https://dwuconsulting.com
Important Disclaimer: This article is generated by artificial intelligence and provided for informational purposes only. It should not be construed as legal advice, investment advice, or financial guidance. Port authorities, investors, and policymakers should consult qualified legal, financial, and technical advisors before making decisions based on this content. DWU Consulting does not provide personalized investment, legal, or tax advice through this article.
Entity financial data: Sourced from the port authority's published ACFR, official statements, and EMMA continuing disclosures. Figures reflect reported data as of the fiscal years cited; current figures may differ.
Credit ratings: Referenced from published rating agency reports. Ratings are point-in-time; verify current ratings before reliance.
Operational statistics: Based on port-published cargo volumes, vessel calls, and operational reports. Cargo data is subject to revision.
Governance and organizational information: Based on publicly available port authority enabling legislation, board records, and organizational documents.
Analysis and commentary: DWU Consulting analysis. Port finance is an expanding area of DWU's practice; independent verification of specific figures against primary source documents is recommended.
Changelog
2026-02-23 — Initial publication. Comprehensive financial profile covering POLA credit structure, FY2024 financials, 10.3M TEU throughput, 2024 refunding bonds, green bond program, capital program, and trade policy risk.POLA Update (February 2026): The Port of Los Angeles handled 10.3 million TEUs in calendar year 2024 — a 20% increase over 2023 and the largest annual percentage gain in Port history. POLA completed a $215.3M refunding in September 2024 (including its first AMT green bonds, with a Sustainalytics SPO), reducing debt service and extending the maturity profile. Unrestricted reserves stand at $1.5 billion — exceeding total outstanding debt of approximately $298 million and representing 1,700+ days cash on hand. Trade headwinds emerged in late 2025 as Trump administration 145% tariffs on Chinese goods caused a measurable decline in Trans-Pacific cargo. The Port is investing $231M in its FY2025/26 capital program, including the Terminal Island Maritime Support Facility ($195M) and on-dock rail expansion. Credit ratings remain AA+/Aa2/AA (all Stable) — the highest ratings of any non-tax-supported seaport in the United States.
Introduction
The Port of Los Angeles (POLA), formally known as the Harbor Department of the City of Los Angeles, is the busiest container port in the United States and the Western Hemisphere. Located at San Pedro Bay in Los Angeles, California, POLA handles approximately 17% of all U.S. container traffic and serves as the dominant gateway for Trans-Pacific trade between Asia and North America. In calendar year 2024, the Port moved 10.3 million TEUs (twenty-foot equivalent units) — a record volume representing a 20% year-over-year increase and the largest annual percentage gain in the Port's history.
POLA occupies a unique position in U.S. municipal finance: it holds the highest credit ratings of any non-tax-supported seaport in the country (S&P AA+, Moody's Aa2, Fitch AA), maintains unrestricted reserves that exceed its total outstanding debt, and generates debt service coverage ratios far exceeding its 2.0x legal covenant. Its $1.5 billion in unrestricted reserves — representing 1,700+ days cash on hand — would be extraordinary even for a utility with predictable regulated revenues; for a trade-dependent port exposed to geopolitical and tariff risk, it represents a formidable credit fortress.
This profile examines POLA's financial structure, bond security, revenue base, capital program, credit strengths and risks, and recent developments relevant to investors, port authorities, and infrastructure finance professionals.
Entity Overview
| Field | Value |
|---|---|
| Full Legal Name | Harbor Department of the City of Los Angeles |
| Market Position | #1 container port in Western Hemisphere (26+ consecutive years); #1 US by TEU volume |
| Governance | Board of Harbor Commissioners (5 members, appointed by Mayor Karen Bass, confirmed by City Council, 5-year terms); Board President: Lucille Roybal-Allard |
| Executive Director | Eugene D. Seroka |
| Structure | Component unit (enterprise fund) of City of Los Angeles; legally distinct for bond purposes |
| Fiscal Year End | June 30 |
| Bond Counsel | Hawkins Delafield & Wood LLP |
| Municipal Advisor | KNN Public Finance, LLC |
| Trustee | U.S. Bank Trust Company, National Association |
Operational Performance
POLA's throughput figures are the defining metric of its credit story. Container volume drives shipping services revenue, which comprises approximately 75% of total operating revenue. The Port's dominant competitive position — anchored by deep-water berths capable of accommodating the world's largest vessels, extensive on-dock rail infrastructure, and proximity to the massive Southern California consumer market — gives it structural advantages that smaller competing gateways cannot easily replicate.
| Metric | CY 2024 | CY 2023 (est.) | Change |
|---|---|---|---|
| Total TEUs | 10,300,000 | ~8,600,000 | +20% |
| Loaded TEUs | 6,700,000 | — | 17% of US total |
| Trade Value | $333 billion | — | — |
| US Container Rank | #1 | #1 | 26+ consecutive years |
| Western Hemisphere Rank | #1 | #1 | — |
Trade Composition: POLA's traffic is dominated by Trans-Pacific trade — primarily imports from Asia (China, Japan, South Korea, Vietnam, Taiwan) destined for the Southern California consumer market and broader U.S. distribution. This concentration creates significant exposure to trade policy changes: the Trump administration's 145% tariffs on Chinese goods, implemented in spring 2025, caused a measurable decline in Chinese imports to U.S. West Coast ports by late 2025. This risk is discussed further in the credit considerations section below.
Infrastructure Advantages: POLA's physical infrastructure provides competitive moats difficult to replicate. The Port features a 53-foot main channel depth capable of accommodating the world's largest vessels (24,000+ TEU mega-ships), eight container terminals with over 25 cranes, extensive on-dock and near-dock rail facilities, and direct connectivity to the national Class I rail network. The Alameda Corridor — a 20-mile, $2.4 billion freight rail expressway completed in 2002 — provides a direct, grade-separated connection to downtown Los Angeles rail yards.
Financial Summary
| Metric | FY 2024 | Notes |
|---|---|---|
| Total Operating Revenue | $684.7M | Shipping services ~75%, leases, fees |
| Shipping Services Revenue | ~$513M | Per-TEU tariffs, dockage, wharfage |
| Operating Expenses | $403.7M | +8.4% YoY; includes LADWP, O&M, salaries |
| Unrestricted Reserves | $1.5B | Exceeds total outstanding debt; 1,700+ DCOH |
| FY 2025/26 CIP Budget | $231.3M | Terminal Island, on-dock rail, environmental |
| Total Port Budget | $2.6B | FY2025/26; includes capital + operating |
Revenue Sources: POLA's revenue base reflects its function as a landlord port — owning the land and infrastructure while leasing terminals to private operators (APM Terminals, Yang Ming, OOCL, TraPac, etc.). Shipping services revenue (wharfage, dockage, container tariffs per Tariff No. 4) comprises approximately 75% of total revenue. The Traffic Mitigation Fee (TMF) — currently $37.71/TEU as of September 1, 2024 (up 6%) — generates additional revenue dedicated to environmental and community programs. Land leases, pilotage fees, wharf storage, and ancillary charges round out the revenue base.
Bond Structure and Debt Profile
POLA issues revenue bonds secured by a net revenue pledge — the first-lien claim on net revenues of the Harbor Department (revenues after deducting O&M expenses). This is the standard structure for U.S. container port revenue bonds.
| Feature | Detail |
|---|---|
| Pledge Type | Net Revenue — senior lien on net revenues of the Port after O&M expenses |
| Rate Covenant | 2.0x net revenue debt service coverage (policy minimum). POLA's actual DSCR is projected at ~8.5x — far exceeding the covenant. |
| Liquidity Policy | 500 days cash on hand (internal target). Actual: 1,700+ days as of FY2024. |
| Outstanding Debt (Fixed Rate) | ~$297.6 million senior lien (as of April 1, 2025); down from ~$450M pre-2024 refunding |
| Bond Ratings | S&P AA+ / Moody's Aa2 / Fitch AA — all Stable. Highest-rated non-tax-supported US seaport. |
| Historical DSCR Range | 3.67x (FY2014) to ~8.5x (projected current); consistently exceeds 2.0x covenant by large margin |
2024 Refunding Bonds — Five Series: In September 2024, POLA issued $215.265M in Refunding Revenue Bonds across five series: Series A-1 AMT ($102.955M), Series A-2 AMT Green ($26.725M), Series B-1 Exempt Non-AMT ($34.4M), Series B-2 Exempt Non-AMT Green ($22.88M), and Series C Governmental Non-AMT ($28.305M). The transaction refunded and defeased approximately $264.7M of Series 2014 bonds, generating debt service savings while extending the maturity profile from 2027 to 2044. Senior underwriter: Jefferies; co-managers: Loop Capital Markets and Ramirez & Co.
Green Bond Program: The A-2 and B-2 series carry green bond designations, with a Second Party Opinion from Sustainalytics. This marks POLA's entry into the formal green bond market — a growing trend among U.S. port issuers (Port of Long Beach, Port Houston, and Virginia Port Authority have similarly issued green-designated or sustainability-linked bonds). Green bond proceeds are directed toward the Port's Clean Air Action Plan (CAAP) and electrification programs, including shore power infrastructure under the $500M POLA-LADWP partnership.
Capital Program
POLA's capital program is focused on four priority areas: (1) terminal modernization for larger vessels, (2) on-dock rail expansion to reduce truck traffic and meet environmental commitments, (3) electrification and zero-emission equipment under CARB mandates, and (4) community and environmental projects (Avalon Promenade, green corridors). Given POLA's $1.5B reserve position and modest debt, the Port funds most capital from operations and reserves rather than bond issuance — a significant credit strength.
| Project | Amount | Status / Notes |
|---|---|---|
| Terminal Island Maritime Support Facility | $195M | Design phase; new consolidated maintenance complex |
| Berths 302-305 On-Dock Rail Expansion | $73.8M total | Active; reduces Port drayage trips by rail substitution |
| Pier 300 Fenix On-Dock Railyard Expansion | $52M | Groundbreak 2025 |
| SR 47/Vincent Thomas Bridge Interchange | $47.6M (Port share) | Critical truck corridor improvement; active |
| Shore Power / Clean Equipment (w/ LADWP) | $500M total | Enhancement program; CARB compliance + electrification |
| Avalon Promenade & Gateway Project | $65M | Broke ground 2024; community/environmental project |
| Pier 400 Corridor Expansion | $73M | Completed 2024 |
Environmental Compliance Costs: California's Air Resources Board (CARB) Advanced Clean Fleets rule mandates zero-emission drayage trucks at California ports by 2035. POLA's electrification partnership with LADWP is the most ambitious shore power program in the U.S., requiring significant grid upgrades in addition to in-port charging infrastructure. While these costs are substantial, the Port's reserve position and strong cash flow generation provide ample capacity to absorb them without materially impacting credit quality.
Credit Analysis
Strengths:
1. Exceptional Financial Metrics. POLA's ~8.5x projected DSCR is extraordinary for any revenue bond issuer. Its $1.5 billion in unrestricted reserves — exceeding total outstanding debt of ~$298M — provides a buffer that would allow the Port to service its entire debt from reserves alone for multiple years without generating a single dollar of new revenue. Days cash on hand of 1,700+ exceeds even the most conservative utility standards. These metrics reflect decades of profitable operations and conservative financial management.
2. Dominant Market Position. POLA has held the #1 US container port ranking for 26+ consecutive years. Its market share — approximately 17% of all U.S. container traffic — reflects structural advantages in vessel access (53-foot channel), terminal capacity, intermodal connectivity, and proximity to the world's largest consumer market. The Los Angeles Basin represents the #2 metropolitan economy in the United States, with a consumption base that anchors import demand independent of national conditions.
3. Minimal Leverage. With only ~$298M in outstanding revenue debt against $685M in annual revenue and $1.5B in reserves, POLA's leverage ratios are extraordinarily low. Debt/Revenue is roughly 0.44x. This minimal leverage gives the Port exceptional capacity to issue additional bonds if needed for capital programs without stressing coverage metrics.
4. Strong Governance and Transparency. POLA's investor relations platform (BondLink at portoflabonds.org) provides frequent continuing disclosure, monthly traffic statistics, and detailed financial reporting. The Board of Harbor Commissioners structure provides independent oversight separate from general City of Los Angeles politics.
Credit Risks:
1. Trade Policy / Tariff Exposure. The Trump administration's 145% tariffs on Chinese goods imposed in spring 2025 represent the most significant near-term risk to POLA's revenue. Approximately 30-40% of POLA's cargo volume originates from China. A sustained reduction in Chinese imports could meaningfully reduce shipping services revenue. POLA's massive reserves provide a substantial buffer against a revenue decline scenario, but sustained trade decoupling would eventually require the Port to reduce operating expenditures or tap reserves for capital funding — neither of which would trigger rating action in the near term given the Port's financial position.
2. Shipping Alliance Dynamics. The global container shipping industry is dominated by four major alliances (MSC/Maersk 2M and successor alliances; Ocean Alliance; THE Alliance; and emerging Premier Alliance post-2024 consolidation). Alliance routing decisions — driven by port congestion, labor availability, tariff rates, and vessel economics — can shift significant cargo volumes between competing gateways on relatively short notice. A major alliance decision to redirect East Coast or Gulf Coast routing could reduce POLA volumes, though the Port's physical infrastructure advantages provide significant protection against such shifts.
3. Labor Risk. West Coast longshore labor (ILWU, International Longshore and Warehouse Union) contract negotiations occur approximately every six years. Work slowdowns and stoppages during contract negotiations historically cause significant cargo diversion to East Coast and Gulf ports, some of which may not fully reverse. The 2023 ILWU contract extension and 2025 renewal negotiations represent ongoing exposure.
4. California Regulatory Environment. CARB mandates represent the most capital-intensive regulatory requirement POLA faces. Zero-emission drayage trucks by 2035, shore power requirements, and potential future vessel emission limits will require substantial capital investment. The Port's reserve position provides capacity to absorb these costs, but cumulative compliance costs could constrain the Port's financial flexibility over the next decade.
Competitive Position
POLA competes primarily with the Port of Long Beach (POLB) — its immediate neighbor and the combined San Pedro Bay port complex's other half — as well as with the Northwest ports (Seattle/Tacoma NWSA) for Trans-Pacific cargo. For East Coast-bound cargo, POLA also competes indirectly with Atlantic ports (NY/NJ, Savannah, Virginia) via the all-water Panama Canal routing.
The POLA-POLB duopoly is unique in U.S. port finance: two separately governed and financed port authorities sharing the same harbor, both rated AA+/Aa2/AA, together processing approximately 45% of all U.S. container imports. Their geographic proximity and infrastructure complementarity effectively insulate the combined complex from any single competing gateway — a shipper who "leaves" POLA for POLB has not actually diversified away from San Pedro Bay risk.
Competitive pressures are concentrated in the premium-service segment: expedited Trans-Pacific service for time-sensitive electronics, fashion, and consumer goods. POLA's investments in on-dock rail, terminal modernization, and the Clean Air Action Plan are partly designed to protect its position as the premium gateway for this high-value cargo.