The 800,000-square-foot warehouse in Rialto has all the proper pedigrees: easy access to the 10, 215 and 60 freeways, state-of-the-art fire control, secured truck court, spacious parking. It's got the kind of neighbors -- Unilever, FedEx, Home Depot, Energizer -- that show it's in the sweet spot of the nationwide cargo distribution system.
The only thing it doesn't have is a tenant. The vast, empty shell, vacant since it was completed more than a year ago, demonstrates the effect the worldwide recession is having all along the supply chain.
"During the boom, this would have been leased by someone before they had even finished building it," said broker Richard John, who during his 30-year career helped sell or lease about 35 million square feet of Inland Empire warehouse space, or enough to cover 729 football fields.
But a salesman can do only so much in the face of the astounding plunge in international trade, which has becalmed U.S. ports, idled hundreds of thousands of rail cars, sidelined tens of thousands of workers and left acres of prime warehouse space echoing like a haunted house.
For The Record
Los Angeles Times Thursday, April 23, 2009 Home Edition Main News Part A Page 4 National Desk 2 inches; 72 words Type of Material: Correction
International trade: An April 16 article in Business about the global downturn's impact on international trade quoted Port of Los Angeles spokeswoman Lori Kelman as saying that March is a historically slow month for port traffic. In fact, she said that February has historically been slow for container traffic at the port and that it was encouraging that the March figures were better. The article also misspelled Kelman's name as Laurie Kellman.
Now the tide appears to be turning, albeit ever so slowly.
"Calls about the property have picked up. It looks promising," said John, senior vice president of the Inland Empire branch office of Collins Commercial. "But we have gone from the 'If you build it, they will come,' 'Field of Dreams' kind of thing to this. The last 12 months have been quite a readjustment for our market."
At the Port of Los Angeles, the nation's busiest cargo container port, about 278,000 containers carrying imported goods arrived in March, down 6.2% from March 2008, port officials said Wednesday. That was the slowest March performance in seven years, but it was substantially better than February, when only 206,000 containers arrived.
At the Port of Long Beach, imports were down 18.3% in March to 186,450 containers.
Port officials are hoping they have seen the worst.
"One month isn't much of a benchmark for us, especially a month like March when things are historically slow," said Laurie Kellman, spokeswoman for the Port of Los Angeles. "But the numbers were up compared to last month, and that is an encouraging sign."
But observers are still chronicling a lot of distressing numbers.
According to AXS Alphaliner, the Paris-based maritime consultant that tracks the world's largest shipping lines, about 10% of the world's container ship fleet was idle as of this week because the ships had no cargo. While the number represented a slight improvement over recent weeks, it was still more than twice as high as the industry's last slump in 2002.
Another maritime industry think tank, London-based Drewry Shipping Consultants, noted that four container lines failed in late 2008 and predicted that 2009 probably would bring more business collapses. Drewry said the industry would have to cut capacity sharply to shore up freight rates, including canceling some of the biggest new ships on order, even if it meant losing prestige and substantial down payments.
In the U.S., some of that tracking is done by Waltham, Mass.-based IHS Global Insight, which follows traffic at the largest seaports in North America on behalf of the National Retail Federation. IHS Global Insight said Wednesday that traffic at those ports was expected to be 21% lower during the first half of 2009 than it was in the first half of 2008, which had come in as the slowest cargo year since 2004.
"The good news is that we've already seen the bottom for the year, and month-to-month numbers are already starting to climb," National Retail Federation Vice President Jonathan Gold said. "We're still going to see double-digit declines compared with last year, but the size of the gap is starting to narrow."
The most important thing about the trade numbers, said one local expert, is the impact on jobs. Since 1994, international trade had been the region's fastest-growing source of well-paying jobs, said Jack Kyser, an economist with the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp.
"Cargo that comes through our two ports gets delivered to every state in the country, and it's responsible for 281,000 jobs in Los Angeles County alone. That's huge," Kyser said.
Warehouse and distribution jobs also have been hit hard.
"Logistics employment has been a major driver of the Inland Empire economy," said John Husing, whose firm, Economics & Politics Inc., is frequently called on by local governments to make regional economic forecasts.
From 2000 through 2007, the warehouse and distribution network brought 40,500 new jobs to Riverside and San Bernardino counties, Husing said. Last year, 1,000 of those jobs were lost and another 5,800 may go this year, he said.
The international trade slump is reflected in the region's soaring commercial real estate vacancy rate.