Record Cargo Traffic Expected at Ports

Fueled in large part by a strong consumer economy, a record $233 billion in imported and exported goods is expected to pass through the Los Angeles Customs District this year, according to a report to be released today.

In addition, international trade is expected to produce records this year for container traffic moving through the Ports of Los Angeles and Long Beach; for international air cargo at Los Angeles International Airport and for direct employment locally--including cargo handlers, shipping clerks and rail and longshore workers.

Taken as a whole, international trade is on a steeper growth curve for the region than entertainment, according to Jack Kyser, chief economist for the Los Angeles Economic Development Corp.

“This is a record-setting year, and international trade is a record-setting industry,” said Kyser, who prepared the report for the Southern California International Trade Conference in Universal City. “This means a heck of a lot of business for the Los Angeles area.

“A lot of people tend to look at Los Angeles as a one-industry town and that industry is the motion-picture industry. But we have a heck of a lot of other arrows in our quiver.”

The LAEDC report quotes figures from the Department of Commerce, showing that direct international trade employment in the region for 2000 is estimated at 472,000, up 12.9% from 1999.

Container traffic at the two local ports is estimated at 9.65 million 20-cubic-foot equivalents, known as TEUs, up 17% from last year. And international air cargo at LAX soared to 1.11 million tons, up 19% from a year ago.

As for trade outpacing Hollywood, Kyser noted the entertainment industry is faced with excess studio capacity. In fact, some studio construction projects have been scrapped due to lack of demand.

By comparison, he said, the two local ports are planning to spend $3 billion in infrastructure and other upgrades to handle increased trade. That figure does not include the $2.4 billion Alameda Corridor project, a 20-mile system of rail crossings and underpasses from the ports to rail yards near downtown Los Angeles that is now under construction.

“The harbors are both pushing capacity. You can’t say that about entertainment,” said Kyser, who will focus on trade in Southern California at a conference sponsored by the Economic Alliance of the San Fernando Valley.

Total reported merchandise trade flowing through the customs district--which includes the ports of Long Beach and Los Angeles, Port Hueneme, LAX, McCarran Airport in Las Vegas and some South Bay oil terminals--is expected to jump by 18.2% this year, compared with 1999, which also was a record. That’s the largest percentage increase since 1985 and is more than double the 9% increase that had been forecast for 2000 just six months ago.

Imports account for two-thirds of the trade total--a record $155.9 billion in finished goods and parts--fueled largely by the booming U.S. economy and increased consumer spending on imported retail items.

“There is a very high level of prosperity right now,” said Larry Keller, executive director of the Port of Los Angeles. “People are buying more things.”

Keller also attributed the increased trade to the growing use by U.S. manufacturers of parts made shore, and to the continued resilience of the U.S. dollar.

The trade figures show the breakneck pace at which imports have increased--up 675% in the customs district since 1980.

At the same time, exports continue to claw their way back from the bruising during the Asian economic downturn of the late 1990s. While exports through the customs district are expected to rise by 15.7% this year, the imbalance between imports and exports is still cause for guarded concern, trade experts and economists said.

The surging imports have tended to hold down inflation, economists said, forestalling even more belt tightening by the Fed. At the same time, however, many view them as a threat to American jobs.

Gary Hufbauer, a senior fellow with the Institute for International Economics, said it’s harder to argue that jobs are threatened because imports are on the rise and unemployment rate is at historically low levels.