Today, September 15, 2011, 2 hours ago
Cargo traffic at the nation's busiest seaport complex declined in August compared with the same month in 2010, suggesting that the sluggish U.S. economy has caused retailers to order fewer goods to sell this holiday season.
Imports through the Port of Los Angeles fell 5.8% to 376,190 containers compared with a year earlier. Exports through Los Angeles surged, however. They jumped 24.8% to 184,232 containers compared with August 2010. At the neighboring Port of Long Beach, imports dropped 14.2% to 267,198 containers and exports fell 3.8% to 121,277 containers, compared with a year earlier, LAtimes reports.
"Retailers appear to be somewhat cautious going into the holiday season," said Phillip Sanfield, spokesman for the Port of Los Angeles.
The ports of Los Angeles and Long Beach are the nation's largest and second-largest container ports in terms of volume and cargo value. Together they form the sixth-busiest harbor in the world and handle more than 40% of the nation's Asian imports. They are the primary reason more than half of the state's 1.1 million logistics jobs are in Southern California.
But as the nation's economy goes, so go the ports, which rapidly feel the effects of slowdowns and surges. Some experts saw positive signs in the August trade statistics and held out hope for a reasonably brisk holiday season; others saw battered consumers and retailers who might rather risk having too few goods on hand than too many.
Sean Strawbridge, managing director of the Port of Long Beach's trade relations and port operations, said he was waiting to see "a moderate surge. If we don't see that by the middle of October, it probably won't happen."
Strawbridge noted that the Long Beach port's traffic numbers reflected that it was operating with six cargo container terminals this year — it had seven last year — after losing Hyundai as a tenant, as it works to develop its $1-billion Middle Harbor terminal expansion and renovation project.
The outlook of Daniel L. Gardiner, chief executive of Ocean World Lines, a subsidiary of Pacer International, which helps customers move their goods from factories to store shelves, is far from rosy.
"I just don't know that the U.S. has fully rebounded from the financial crisis, whether we are talking about consumers with mortgages that are still underwater or people whose credit cards are maxed out. I don't know that they are out of disposable income, but it certainly seems that way," Gardiner said.
As a result, retailers "are still maintaining low inventories," he said.
"Who wants to get caught with their supply chain overloaded when they can stay thin?"
David Shulman, senior economist at UCLA Anderson Forecast, said that consumer confidence "has fallen off a cliff. We had zero growth in retail sales in August, and that is not a good harbinger for the holiday season. I don't think we are heading for a double-dip recession, but this could mean that we are in for a very long period of slow growth and high unemployment."
A bright spot: The Port of Los Angeles is on pace for a record year of exports.
"The export figures look fine," said Jock O'Connell, a trade expert with Beacon Economics.
"They are where we want to be to build up trade and boost the national economy."
O'Connell said retailers can't wait much longer if they intend to have a wide selection of products ready on store shelves for holiday shoppers.
"You have to make the factory orders, and there's a lag time for manufacturing and shipping, so at some point you just have to pull the trigger," O'Connell said.
Through August, the ports of Los Angeles and Long Beach were still running slightly ahead of their 2010 pace when imports, exports and empty containers were tallied together.
Los Angeles moved 5.2 million containers through the first eight months of the year, an increase of less than half a percent. Long Beach moved 4.1 million containers, up 2.1% compared with the same period last year.