Ports of L.A., Long Beach show hints of revival
The wide waterways at the ports of Los Angeles and Long Beach remain strangely calm, but a sampling of officials from along the international trade chain said Wednesday that business was stirring to life again.
“Last year, I reported that we still had a pulse. Now, the beat seems to be picking up a bit,” said Richard D. Steinke, executive director of the Port of Long Beach, which is second only to the neighboring Port of Los Angeles among U.S. cargo container ports.
But the mood for 2010 was still sobering. Officials predicted conservative trade growth, cautious behavior by consumers and slow job gains.
The comments came at the annual Pulse of the Ports conference hosted by the Port of Long Beach, an event that tries to predict what levels of business can be expected for the peak holiday retail season and the year.
Joseph P. Magaddino, a professor of economics at Cal State Long Beach, said he didn’t expect the economy to grow enough to bring unemployment down quickly and get consumers out shopping again for the goods that flow through the ports.
“The economic expansion has begun,” he said, “but not without problems.” Trade through the harbors of San Pedro Bay was up 13% for the first two months of the year, but the comparison is with very weak year-earlier traffic.
“West Coast ports are the pulse of this nation,” said Fred Malesa, vice president for international intermodal for BNSF, one of the two major railroads, along with Union Pacific, serving Los Angeles and Long Beach.
“The prognosis for the patient, the trade sectors, looks pretty good,” Malesa said. “It’s heading in the right direction. Cautious optimism is a fair description of where we are.”
The shipping industry is worried about whether the increased business represents merely short-term warehouse inventory replacement by retailers rather than a sign of a healthy rebound, said Wolfgang Freese, president of shipping line Hapag Lloyd America.
“We hope that there will be increased demand during the peak season,” said Freese, noting that the world’s ocean freight carriers collectively lost $22 billion in 2009. “I look forward to some sunny days to come.”
There was some good news.
Peter Peyton, president of the International Longshore and Warehouse Union, Marine Clerks Assn. Local 63 in San Pedro, said that dockworkers who had been getting only two or three days of work a week last year were now averaging three to four days.
Cargo terminals, where containers are unloaded from ships, are seeing more business, said Frank Capo, vice president of customer service and sales for Total Terminal International. “Vessel volumes are increasing,” he said. “It’s somewhat modest, but the signs are positive.”
The health of international trade is key to the Southern California economy, with more than 300,000 jobs tied to the docks as well as to the warehousing and distributing of imported and exported goods, experts say. The industry’s revival locally is threatened not just by the tepid recovery but also by growing competition from Canada, Mexico and the East Coast.
“Southern California is an expensive place for the industry, and interesting alternatives are picking up in Canada and Mexico,” Freese said.
“Other West Coast port infrastructures have been enhanced. The East Coast is more attractive. To challenge this trend, Long Beach is well advised to listen.”
Jeff Siewert, director of international logistics for Home Depot Inc., said the Atlanta retailer had been hearing from other ports trying to drum up business.
Instead, Home Depot is pondering plans to bring considerably more cargo through Long Beach, Siewert said.
“Long Beach gets it,” Siewert said.
