Wave of imports lifts ports
Imports at the nation’s trade gateways -- including the ports of Los Angeles and Long Beach -- appear to have ended their long decline and are poised for a strong recovery, according to preliminary data released Monday.
Cargo volume at ports on the Atlantic, Pacific and Gulf coasts were higher in December than a year earlier, the first such gain in 28 months, according to the National Retail Federation and consulting firm Hackett Associates.
Final results for the two local ports won’t be available until next week, but economists who track volume at the nation’s busiest ports each month called the new report the strongest sign yet that the bottom-dwelling days are over.
“It’s the first strong sign that a recovery is finally underway, and it’s being driven mostly by retailers restocking their inventories and by the impact of the economic stimulus package,” said Ben Hackett, founder of Hackett Associates, a business consulting firm that tracks seaport, railroad and trucking industry volumes for some of the nation’s biggest retailers.
Hackett predicted that monthly imports would remain above last year’s levels for at least the first half of 2010.
Hackett said the strongest gains in volume would be on the West Coast. That’s particularly important because international trade provides so many of the region’s jobs. The company tracked activity at ports in Los Angeles, Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Virginia, Charleston, S.C., and Savannah, Ga., on the East Coast; and Houston on the Gulf Coast. In 2009, a total of 12.7 million containers came into those ports, the lowest figures since 2003 and a decline of 17% from the 15.2 million in import containers in 2008. But there was a slight uptick of 1.7% in December from a year earlier.
At L.A. and Long Beach, the improvement will be most obvious in February, the report said, when about 496,000 containers are expected to come into the twin ports, which would be an increase of 40% from February 2009, the ports’ worst month of the recession.
The report said that Los Angeles and Long Beach should see growth of about 3%, or about 3.3 million containers, through June, compared with the first half of 2009.
Local port directors have been looking for just such an indication for several months. L.A. and Long Beach are the two busiest container ports in the U.S., followed by New York/New Jersey and Savannah.
“We watch our numbers like a hawk,” said Geraldine Knatz, executive director of the Port of Los Angeles, in a recent interview. “We’re maintaining our market share.” Her counterpart at the Port of Long Beach, Richard Steinke, said he was always confident that “the cargo will come back. It may not come back as rapidly as in the early 2000s, but it will be back.”
Bigger trade numbers mean more money, which boosts the local economy like the arrival of the ‘49ers during the Gold Rush days, said John Husing, an economist who studies trade’s effects on the Inland Empire’s vast warehouse and distribution network for retail goods.
“It didn’t just help the people who found the gold; it had secondary impacts when the money from that gold was spent in local general stores and saloons,” Husing said. “This will mean more work for dockworkers, truck drivers, warehouse employees, rail workers, and they will spend those dollars here in the region.”
There were some important caveats.
Hackett said that most of the increasing volumes “would come first at the low end of the value chain, involving low-cost retail outlets. There won’t be a significant increase in the upper range of consumer durables, high-end electronics or expensive clothing.”
One unknown would be whether the recovery could sustain itself after the current economic stimulus packages have come to an end. That was still uncertain, Hackett said.
And he said consumers were more wary than perhaps ever before at a time when credit was also much harder to come by. People won’t open their wallets, Hackett and Husing said, until they see signs of job growth in their communities.
“If the businesses around you are hiring, you’re going to feel more confident about spending money,” Hackett said.
But Jonathan Gold, vice president for supply chain and customs policy for the National Retail Federation, said the numbers and projections were encouraging despite those uncertainties.
“These numbers are a clear sign that retailers are optimistic about 2010. Retailers are still going to be cautious with their inventories, but we wouldn’t see these increases in imports if stores weren’t expecting sales to improve,” Gold said.
“It’s been a long time since we’ve seen year-over-year volume go up, so this is definitely good news,” Gold said.
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