Los Angeles port has best January ever
The nation’s busiest seaport complex had its best January since the recession, moving more cargo containers in that month than all but eight other U.S. ports usually move in an entire year.
The trade numbers from San Pedro Harbor also showed the increasing importance of exports at the Ports of Los Angeles and Long Beach, which rank first and second in the U.S. for container cargo. As recently as five years ago, imports outnumbered exports by more than 3 to 1. But in January, the gap had shrunk to a little more than 2 to 1.
There hasn’t been a sharp decrease in the U.S. trade deficit, but Los Angeles and Long Beach have done well in luring more customers who ship goods overseas, according to economist Paul Bingham. Another factor, Bingham said, was the fact that a weak U.S. dollar was making domestic goods more affordable to foreign buyers.
“The biggest underlying story is the growth in exports,” said Bingham, the economics practice leader for CDM Smith Inc. in Virginia. “The demand is coming from the faster recoveries from the recession that we are seeing in the major and the emerging Asian economies.”
Cargo numbers at the two ports are an important indicator of the strength of the Southern California economy and there is a strong correlation between the number of containers moving through the ports and the number of trade-related or logistics jobs that are available as a result.
There are about 640,000 people working in trade-related jobs from Ventura County to San Diego County, according to Inland Empre-based economist John Husing. During the height of the economic boom, that number swelled to more than 709,000. During the recession, the number of jobs fell to fewer than 600,000.
For Los Angeles, it was the best January on record, as the port handled 698,715 cargo containers, an increase of more than 38,000 from a year earlier. Imports through the port were up about about 5.25%, or 18,000 containers. But the bigger percentage increase came in exports, which rose by nearly 6% to 168,427 containers.
Los Angeles’ January numbers broke a 5-year-old record set during the height of a global economic boom, in 2007, when the port moved 691,602 containers. Only 124,433 of them were exports.
Long Beach’s January numbers had not been released and were not expected to look as strong as Los Angeles, but the combined numbers for both ports were still expected to show the best January for cargo since 2008, before the recession began.
Los Angeles port officials say they were surprised by the strength of the numbers.
“This past month took us a little bit by surprise,” said Katherine McDermott, the Los Angeles port’s deputy executive director for business development, “but it’s obviously a very nice
surprise. We have been forecasting conservatively for a 2% to 3% increase in cargo volumes in 2012.”
McDermott said that port officials say there are too many uncertainties about the economy to predict that the rest of 2012 will be as strong as January. For one thing, she said, some of the port’s biggest cargo volumes revolve around the housing industry, including building materials, appliances and furnishings.
“How strong will home sales be?” McDermott asked rhetorically. “That’s important to us because so much of our business is related to that. The numbers this year are going to depend on the total economic picture: job creation, the housing market and the strength of the dollar compared to other currencies.”
Other uncertainties involve some of the Los Angeles Customs District’s biggest trading partners, according to a report released Wednesday by the Los Angeles County Economic Development Corp. The Los Angeles Customs District is primarily made up of the two ports and Los Angeles International Airport.
The report, for example, mentioned Japan’s continuing struggle to recover from the March earthquake and tsunami,Taiwan’s slide into recession late last year,Thailand’s worst flooding in more than 70 years and economic weakness throughout Europe.
For January, at least, the nation’s other major trade gateways also saw improvement in cargo numbers from a year earlier. Zepol Corp., which tracks international trade, said imports into the U.S. grew about 5.8% in January.
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