Trade at international ports is on track to drop more than 10% this year, one of the steepest declines ever, according to a new maritime industry report.
Cargo ships will carry 27 million fewer containers by year's end than they did in 2008 -- a reduction roughly equivalent to all of the cargo containers handled by the five busiest U.S. seaports in a typical year, according to London-based Drewry Shipping Consultants' Container Forecaster Report.
"There has never been a decline like this before. We have never seen numbers like these," said Neil Dekker, editor of the Drewry report. "The container industry is looking at a $20-billion black hole of losses. We can expect a lot of casualties."
Because the ports of Los Angeles and Long Beach are so busy -- they handle more than 40% of U.S.-bound cargo container trade -- the wharves here are disproportionately affected by the drop-off in imports and exports, Dekker said.
The ramifications for the Los Angeles and the Long Beach ports will be felt in some of the best-paying blue-collar jobs in the nation, as longshore workers lose hours at the docks, truckers have fewer containers to carry and railroad traffic ebbs. The Inland Empire, which has the nation's second-highest unemployment rate among urban areas because of the collapse of its warehouse and distribution system, will continue to suffer, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
"The forecasts for 2010 call only for a very moderate recovery in trade volume. This is a long-term problem. It will take several years for us to get back to the trade levels we saw in 2006 and 2007," Kyser said.
At the Port of Long Beach, the nation's second-busiest container port behind Los Angeles', trade volumes have been knocked back all the way to 2003 levels, according to spokesman Art Wong, wiping out all of the trade gains recorded during the boom years of 2004 through 2007. Similar results can be found at many of the major U.S. ports.
"It's unprecedented for us to see this kind of slide. Is it going to flatten out? Are we at the bottom? We don't know yet," Wong said.
The continuing global recession has run so deep that it has caused Moody's Investors Service to downgrade its outlook to negative overall for the 53 U.S. ports whose credit ratings it tracks.
