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Southland ports' June decline in traffic 'a concern'

Unlike most major U.S. ports, L.A. and Long Beach received less cargo than they had in May.

July 18, 2009|Ronald D. White

Cargo traffic at most of North America's busiest seaports in June crept slightly above the recession-wracked numbers recorded in May -- but not at the ports of Los Angeles and Long Beach, the nation's biggest freight complex.

Such a month-to-month decline is unusual at this time of year, port officials said. That's because June is when the ports usually see a pre-holiday retail season mini-bump in business from back-to-school products arriving from overseas.

"It's a concern. The numbers should be rising from the slow winter season all the way through to the peak holiday retail season, and they mostly aren't rising," said Art Wong, a spokesman for the Port of Long Beach.

The 12 largest North American ports received an estimated 1.06 million cargo containers carrying goods from overseas in June, according to IHS Global Insight, which tracks cargo on behalf of the National Retail Federation. That was a slight increase from the 1.04 million in import containers in May but an 18% drop from June 2008.

"Monthly numbers are rising as we enter the back-to-school season and will continue to do so as we build up to the holiday season, which is the cycle we see every year whether the economy is good or not," said Jonathan Gold, a vice president of the retailer group. "The volumes are still far below what we saw last year and it's going to stay that way until the economy begins to recover."

At the Port of Long Beach, 206,358 containers of imported goods arrived in June, a decrease from the 208,591 in May and a 28.4% drop from a year earlier. Los Angeles recorded 281,175 import containers in June, a decrease from the 304,110 in May and down more than 17% from June 2008. Exports at both local ports followed the same pattern.

Experts fear that the ports of Long Beach and Los Angeles, which receive more than 40% of U.S. container cargo, experienced weaker numbers in June because of less confidence among consumers and businesses in California, who may be buying and ordering less merchandise, respectively.

As a result, the Southland ports may be experiencing more economic malaise than others, said Jack Kyser, economist at the Los Angeles County Economic Development Corp.

Another possible reason is fallout from the inability of Gov. Arnold Schwarzenegger and state lawmakers to adopt a state budget that deals with the swelling deficit, Kyser said.

"People are concerned about cuts in state programs, especially if they rely on any kind of state funding," said Kyser, who blamed the impasse in Sacramento for further dampening confidence among consumers and businesses in California.

"State governments should be a stabilizing force during hard times," he said. "This time around, it is a destabilizer."


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