Los Angeles / Long Beach container traffic forecast “gloomy”
Via dailybreeze.com:
The two ports will see a 1 percent annual increase in loaded container traffic this year, to a combined 15.8 million 20-foot equivalent containers, the study forecasts.
“We’re used to 10-percent-a-year growth in container traffic,” said Jack Kyser, chief economist at the LAEDC. “We didn’t get that last year. We won’t get that this year. The question is, will it recover next year?”
The slow growth is due to a major slump in imports, which are forecast to post a meager 0.2 percent rise in loaded container traffic this year at the two ports.
That contrasts with an impressive 15.6 percent rise in exported loaded containers forecast for this year.
The article proceeds to cite the numerous reasons for the drop in import traffic at the ports: weak U.S. dollar, lower auto and retail demand, financial market issues, rising labor/production costs at China, etc. However, there is little to no mention of the many other factors that risk the attractiveness of the Los Angeles/Long Beach port complex to the trade community: the challenges of the Clean Air/Clean Truck Program, the imposition of more port container fees, the ongoing threat of container tax legislation, terminal congestion and opposition to infrastructure improvements, rail congestion and container handling inefficiencies, etc. Certainly some of these factors are not unique to Los Angeles/Long Beach or California, they are issues and problems that face ports and terminals nationwide and the world over. But the combination of these many issues paint a picture of a port complex increasingly at risk of losing its competitive edge. Demand for All Water service to the East Coast continues to rise and vessel capacity is tight as shippers increasingly bypass the West Coast entirely. The Prince Rupert Port Authority north of Vancouver actively markets itself as the superior rail-link to the U.S. as opposed to Los Angeles and claims the “shortest link between Shanghai and Chicago”. Other West Coast Ports such as Seattle and Portland are watching the events unfold in Southern California with a keen interest to boost the volumes flowing through their ports. While it’s clear that macro-economic conditions are affecting the volumes of imports flowing into the U.S. and therefore Southern California the ports should not overlook the fact that some of their actions may be hurting them over the long run. As Jack Kyser, Chief Economist at the Los Angeles County Economic Development Corporation, is quoted in this article:
Ranked by number of loaded containers handled, the Port of Los Angeles was still No. 1 last year, although its container count slipped 0.1 percent as some ships diverted to other ports including Long Beach. That diversion was partly a result of a perception that the local port is “so busy wading through the environmental issues that they can’t focus on the other things” such as expansion, Kyser said.
Emphasis ours.
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