Los Angeles: The slowdown in international trade has left the docks at the United States' biggest seaport complex quieter than they've been in years.
Some workers, particularly non-union "casuals", at the Los Angeles and Long Beach ports wait for shifts that never come. Automobiles and other merchandise pile up as consumers dig in for a long economic winter.
But the problems at the twin ports, along with smaller West Coast harbours, extend beyond the nation's economic woes, maritime experts say, and changes on the horizon could leave the seaports struggling to keep customers.
That's the assessment of a recent report by London-based Drewry Supply Chain Consultants, a maritime industry research firm that has about 3,000 clients in more than 100 countries. West Coast ports will see increased competition from the Panama Canal, which is undergoing a bigger-than-expected expansion due to be completed in 2014, Drewry said. In addition, rising Chinese labour costs will push some manufacturing back to Mexico and South America.
Even if global trade returns to its formerly robust pace, Drewry said, "any new trade will probably pass the West Coast by. Volumes are unlikely to decline, but the days of strong growth on the Pacific Coast are behind us."
Implications
The ports of Los Angeles and Long Beach are directly or indirectly responsible for 886,000 jobs in California, according to a 2007 study by the Alameda Corridor Transportation Authority. The $256 billion in US trade that moved through the ports that year, including $62.5 billion in California cargo, was also responsible for $6.7 billion in state and local tax revenues, the study said.
But times change, Drewry and other maritime experts say, and future economic conditions will shine a more favour-able light on the all-water routes to East Coast and Gulf Coast ports by way of the Panama and Suez canals.
Some of that trend can be seen already.
A.P. Moller Maersk, the world's biggest shipping line, this year reduced its business from Asia to the US West Coast in favour of stronger Asia-to-Europe trade. This month, the Denmark-based giant announced more changes.
Maersk said it would join with the world's third-largest shipping line, France's CMA CGM, and cut back its Asia-to-US business by an additional 8 per cent with new routes through the Panama and Suez canals.
The new business partnerships come at a time when the maritime industry is reeling from the global economic slowdown and credit crisis, delaying delivery of new vessels and killing deals considered too much of a revenue risk. Those pressures, Drewry says, will result in changes that will be difficult to unravel even as global trade eventually recovers.
Officials at West Coast ports say that they are doing what they can to remain competitive. But Drewry and other authorities say the ports suffer from a number of problems, including a lack of land for expansion and rail capacity that is significantly lower than in the past, despite billions of dollars in investments.
Larger ships
Now, Drewry says, West Coast market share is about to take a serious hit, "possibly forever", from a "rejuvenated, aggressive and soon-to-be widened Panama Canal" that will have locks capable of handling cargo ships carrying as many as 13,000 containers - much larger than the 8,000-container ships it was originally expected to accommodate.
The American Association of Port Authorities, which represents most of the Western Hemisphere's major harbours, is devoting the current issue of its Seaport Magazine and an upcoming seminar in January to the shifting international trade routes and the Panama Canal expansion.
