Top US ports to recover by 2013, says report
As the ports of Los Angeles and Long Beach post another round of dismal monthly import statistics, a new assessment finds that the nation's busiest seaport complex will need at least four more years to fully recover its momentum - not to mention the jobs, incomes and revenues that went with it - after the worst global recession in 60 years, the Los Angels Times reported.
The recovery will be so slow and painful that a return to the pace set during the economic boom year of 2006 - when the ports handled 15.8 million cargo containers bound for most parts of the US - won't come before 2013.
That is the grim conclusion of a new report produced for the local ports but not released to the public.
"It's going to take a long time to climb up out of this," said John Husing, an economist and cargo expert who has read the report. The comeback "is not going to look like a V, which would be an equally sharp recovery. It's going to look like a very wide check mark."
The force of the recession can be seen in what has been lost along the supply chain.
In 2006, dock jobs were so plentiful that longshoremen could count on working multiple shifts. Even part-time "casual" dockworkers were working nearly full-time hours. And warehouses in the nation's fastest-growing cargo distribution network had tenants before their construction was complete.
Now, full-time longshoremen have days without work. Vacant warehouses spend months on the market.
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 plummeting values of homes, stock portfolios and other assets is expected to result in a permanent reduction in wealth and a concomitant reduction in disposable income. Absent a phenomenal rebound (which no one is predicting), the US population will have less to spend on imports in any given year than was previously forecast," the report said.
Moreover, the recession and its multiple roots have caused a jolt to the collective psyche of consumers, such that even when their fortunes begin to recover they will be more reticent about their spending than in times past, it said.
The report tracks with what economists at the Los Angeles County Economic Development Corporation 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.
The absence of easy credit also will slow the recovery of international trade, said Jack Kyser, an economist at the business group.
Mike DiBernardo, director of marketing for the Port of Los Angeles, acknowledged that the days of double-digit cargo growth are gone for a while, to be replaced eventually by annual increases of four percent to five percent. But, he added, the port still has to prepare for additional traffic.
That's why, DiBernardo said, port officials have moved ahead with expansion plans for its TraPac terminal, which includes more space, a longer wharf and an on-dock rail where cargo can be loaded directly onto trains.
"We're not stopping," he said. "We're going to continue to develop our terminals and we are talking to other customers about their needs."
The slump was again evident in the July trade numbers for both ports.
Imports at Los Angeles, the nation's busiest port, were down 16.9 percent to 305,226 cargo containers compared with a year earlier. Overall for the year, traffic is down 15.9 percent to 3.77 million containers, counting imports, exports and the number of empty boxes that leave the port bound for Asia.
Imports at the nation's number port, Long Beach, were down even more sharply in July compared with a year earlier, by 18.6 percent to 221,719 containers. Overall cargo traffic at Long Beach is down 26.8 percent for the year to 2.77 million containers.
The recovery will be so slow and painful that a return to the pace set during the economic boom year of 2006 - when the ports handled 15.8 million cargo containers bound for most parts of the US - won't come before 2013.
That is the grim conclusion of a new report produced for the local ports but not released to the public.
"It's going to take a long time to climb up out of this," said John Husing, an economist and cargo expert who has read the report. The comeback "is not going to look like a V, which would be an equally sharp recovery. It's going to look like a very wide check mark."
The force of the recession can be seen in what has been lost along the supply chain.
In 2006, dock jobs were so plentiful that longshoremen could count on working multiple shifts. Even part-time "casual" dockworkers were working nearly full-time hours. And warehouses in the nation's fastest-growing cargo distribution network had tenants before their construction was complete.
Now, full-time longshoremen have days without work. Vacant warehouses spend months on the market.
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 plummeting values of homes, stock portfolios and other assets is expected to result in a permanent reduction in wealth and a concomitant reduction in disposable income. Absent a phenomenal rebound (which no one is predicting), the US population will have less to spend on imports in any given year than was previously forecast," the report said.
Moreover, the recession and its multiple roots have caused a jolt to the collective psyche of consumers, such that even when their fortunes begin to recover they will be more reticent about their spending than in times past, it said.
The report tracks with what economists at the Los Angeles County Economic Development Corporation 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.
The absence of easy credit also will slow the recovery of international trade, said Jack Kyser, an economist at the business group.
Mike DiBernardo, director of marketing for the Port of Los Angeles, acknowledged that the days of double-digit cargo growth are gone for a while, to be replaced eventually by annual increases of four percent to five percent. But, he added, the port still has to prepare for additional traffic.
That's why, DiBernardo said, port officials have moved ahead with expansion plans for its TraPac terminal, which includes more space, a longer wharf and an on-dock rail where cargo can be loaded directly onto trains.
"We're not stopping," he said. "We're going to continue to develop our terminals and we are talking to other customers about their needs."
The slump was again evident in the July trade numbers for both ports.
Imports at Los Angeles, the nation's busiest port, were down 16.9 percent to 305,226 cargo containers compared with a year earlier. Overall for the year, traffic is down 15.9 percent to 3.77 million containers, counting imports, exports and the number of empty boxes that leave the port bound for Asia.
Imports at the nation's number port, Long Beach, were down even more sharply in July compared with a year earlier, by 18.6 percent to 221,719 containers. Overall cargo traffic at Long Beach is down 26.8 percent for the year to 2.77 million containers.