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Cargo traffic at L.A., Long Beach ports up slightly in May

Experts say it isn't clear whether the increase of just over 1% is a sign of more traditional international trade patterns this year or a hint of weakness in the overall economic recovery.

June 15, 2011|By Ronald D. White, Los Angeles Times
  • The ports of Los Angeles and Long Beach together rank as the sixth-busiest container port in the world and are an important barometer of the strength of the overall U.S. economy. Above, at the Port of Long Beach last year.
The ports of Los Angeles and Long Beach together rank as the sixth-busiest… (Mariah Tauger, Los Angeles…)

Cargo movement through the nation's busiest seaport complex increased a little more than 1% in May compared with the same month last year, port officials said Tuesday. But experts said it wasn't clear whether the figures were a sign of more traditional international trade patterns this year or a hint of weakness in the overall economic recovery.

In May 2010, the ports of Los Angeles and Long Beach were roaring back from the global recession. Retailers were replenishing record-low product inventories and the peak holiday shipping season had begun early. This year the peak season isn't expected to start until later in the summer, and a key trading partner — Japan — is still recovering from earthquake and tsunami damage.

"The fact that the numbers are up over a very strong 2010 is a good sign," said John Husing, whose Redlands firm, Economics & Politics, tracks international trade's effects on the Inland Empire.

"But it might speak to some unexpected slowing," he said. "There's a possible Japan effect in the numbers, but it's possible we're also seeing a general weakness in the U.S. economy, and that would be very scary."

The ports of Los Angeles and Long Beach rank first and second in the U.S. in the number of cargo containers they move. Together, they handle more than 40% of the nation's Asian imports and rank as the sixth-busiest container port in the world, making them an important barometer of the strength of the overall U.S. economy.

Katherine McDermott, deputy executive director for business development at the Port of Los Angeles, said, "One of the things we're particularly pleased with is that we saw improvement even though May of 2010 was a pretty strong month."

Art Wong, spokesman for the Port of Long Beach, said the numbers weren't bad considering they reflected summer shopping goods and only the beginning of products destined for back-to-school sales, unlike last year when retailers were ordering products earlier than usual.

In May, the two ports handled 1.23 million cargo containers compared with 1.21 million in May 2010. The figure included a 9% drop in the number of empty containers that were being shipped back to Asia, a fact that one trade expert found troubling. There are usually a lot of empty containers shipped from U.S. ports to Asia because the U.S. imports far more than it exports.

"The empties may reflect a sense that retailers think that U.S. consumer demand for imported goods is going to be much lower than was originally forecast," said Jock O'Connell, international trade advisor to Beacon Economics. "If you don't think people will be buying as much, there's no need to ship back an empty box."

Los Angeles handled 360,969 import containers in May, up 5.49% from 342,171 in May 2010. Long Beach had 275,100 import containers in May, up 4% from 264,505 in May 2010.

Los Angeles had a strong month for exports, up 14.7% to 184,275 containers from 160,621 a year earlier. But Long Beach exports were down 6.1% to 130,161 from 138,659 a year earlier.

For the year through May, traffic at the Port of Los Angeles was up almost 6.6% to more than 3.1 million containers. At the Port of Long Beach, trade for the first five months of the year was up 6.1% to about 2.4 million containers.

ron.white@latimes.com

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