Thursday, August 20, 2009

Ports of LA / LB Face a Grim Future

Port statistics came out today for LA / LB. This is volume for July.

Los Angeles: 305,226 inbound, 138,269 outbound. This is down -2,3% over the month, -17.5% over the year.

Long Beach: 221,719 inbound, 108,420 outbound. Up 4.8% over the month, down 23% over the year.

Combined, volume is up 4.6% over the month, down 20% over the year.

This is the start of the peak season, so seeing LA being down over the month brought a little tear to my eye. The decline in imports has been slowly receeding at LA, so slowly receeding that it might not look like any improvement at all.

Seeking Alpha has a pretty grim outlook

And to add insult to injury to the state which is bankrupt in all but name and continuing to pay with IOUs, the future before the port complex is looking bleaker by the day as seaborne traffic may gradually shift completely away from the harbors, which are among the primary economic drivers for this Top 10 global economy.
But sluggish recovery from the recession isn't the only thing that threatens the amount of business at the two ports.The report said that a larger number of freight shippers will prefer to move more cargo via a wider Panama Canal channel that is expected to open in 2014, bypassing the Southern California ports' rail connection for moving freight to other parts of the U.S.


Among the report's many points is that this recession is far more complicated than the economic downturns following the dot-com bust and the 9/11 terrorist attacks, after which pent-up consumer demand rather quickly returned the economy to relatively normal levels.This time, no such pent-up demand exists. Instead there has been a fundamental lowering of financial capability, according to the report, produced for the ports by consulting firms Tioga Group and IHS Global Insight.
The report tracks with what economists at the Los Angeles County Economic Development Corp. have been predicting and leads experts there to question whether international trade "will be the big engine of growth that it once was" for the region.

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