One Historic Step Demands Others

The Alameda Corridor, which opens today, has secured Southern California’s position as the leading U.S. center of international trade.

Now it’s time to deal with other challenges facing this region’s trade economy.

The corridor is only one of many investments this state and region must make to remain competitive in global trade. The region must invest in additional rail corridors to help relieve congestion and accommodate the certain growth of cargo volumes. The port facilities must continue to be modernized to cope with increasing demands of shippers and competition from ports elsewhere.

Also, the region must decide on a new cargo airport as a companion to Los Angeles International. That is key not only to air cargo but also to the region’s future in manu- facturing.

Much is at stake. The ports of Los Angeles and Long Beach now are the world’s third-busiest ports, after Hong Kong and Singapore. LAX is the second-busiest cargo airport--after Memphis, headquarters of FedEx Corp.

Leadership in trade is valuable. The flow of more than $200 billion in imports and exports through this region results directly in almost half a million jobs, ranging from bankers to stevedores to software engineers to warehouse handlers.

It takes money to sustain this leadership. The reason for spending $2.4 billion to build the Alameda Corridor was to prevent ships from being backed up in the ports. The 20-mile corridor rail trench runs from the ports of Los Angeles and Long Beach to rail yards near downtown Los Angeles.

“The corridor allows the ports to process the enormous increase in goods coming from Asia, particularly China,” says James Hankla, head of the Alameda Corridor Authority.

But the Alameda Corridor is not enough. An additional $1.25 billion is being spent to complete two companion “corridors” to move cargo trains out through the San Gabriel Valley and north Orange County to San Bernardino and Colton, where the Union Pacific and Burlington Northern Santa Fe railroads dispatch shipments to Chicago, Texas and beyond.

Work on Alameda East, a $900-million project to construct railroad grade crossings in the San Gabriel Valley, is not far along. The $350-million Placentia Corridor in Orange County has completed planning and started construction.

And those proposed rail corridors don’t even deal with a tremendous local problem. Half of the goods shipped through the ports stay here, but the trucks used to deliver this cargo locally are clogging highways to such destinations as Ontario and the Inland Empire, says John Husing, a San Bernardino-based economist. It will take new thinking and new money to ease that congestion.

Past investments to deepen and modernize the harbors gave Los Angeles and Long Beach an unbeatable edge over Oakland, San Francisco, Seattle-Tacoma and other West Coast ports. But global trade is becoming more sophisticated and shippers more demanding as cargo volumes expand.

Already, shippers such as Wal-Mart Stores Inc. are avoiding Southern California and sending some goods in smaller ships through the Panama Canal to Charleston, S.C., and Norfolk, Va., which are closer to Eastern population centers.

Cargo volumes are going to get larger. China is building up the port of Shanghai with the most modern equipment. The port of Hong Kong, which moves cargo from southern China, can process containers faster than any port on Earth.

All of which has meaning for upcoming labor negotiations at the ports of Los Angeles and Long Beach. A major issue will be attempts by shippers to introduce automated gates that can read bar codes on containers and thus move them through faster. The International Longshore Workers union is opposing introduction of such equipment. If there is labor strife or the ports fail to increase productivity, shippers will find alternatives, experts in the logistics industry say.

Air cargo, a vital part of this region’s industry, may be overlooked in today’s celebrations of the Alameda Corridor. But the growth of trade makes it imperative that Southern California get serious about establishing another cargo airport as a companion to LAX. The products that this region specializes in, such as biomedical instruments and electronic parts, are high-value items that normally ship by air.

Orange County’s refusal to build a new airport and San Diego’s growing need for one only reinforce the need for a new air cargo facility, probably in the Inland Empire.

Moreover, trade is no longer a simple two-way street. Goods now move from one country to another and then on to another.

In this region, many electronic parts go back and forth, with facilities in Asia and Latin America doing part of the work and factories here doing other parts. That’s the way MTC Worldwide in City of Industry manages to circulate computer hard drives among customers in Taiwan, Japan, China and the U.S.

Thus international trade, which has expanded employment in the logistics industry, also contributes to this region’s wealth of manufacturing jobs. More than 605,000 Southern Californians are employed in manufacturing, according to the Los Angeles County Economic Development Corp.

The opening of the Alameda Corridor today underscores the emergence of Southern California as a major center in the continually developing colossus of trade that is the Pacific Rim. It is part of a historic process that demands an expansion of vision to see that this entertainment capital and center of aerospace and defense work maintains its place also as a great international port region.

James Flanigan can be reached at jim.flanigan@latimes.com.

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Trade Center

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