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Are The Ports of Los Angeles and Long Beach Losing Their Edge? A Re-Valuation of Competitiveness


The expansion of the Panama Canal has prompted a lot of concern about the future of not only the Ports of Los Angeles and Long Beach but also Southern California’s logistics sector, which serves these maritime gateways.

The great majority of goods imported through the two ports, nestled next to each other on San Pedro Bay, are bound for destinations outside of the Los Angeles Basin. Transporting imported goods to their end markets literally requires – in addition to dock workers – an army of people employed in trucking and railroading or working in the huge warehouses, distribution centers, and transloading facilities that consume so much real estate throughout the Inland Empire and increasingly stretch over the Tehacipis into the San Joaquin Valley.

Discussions about the volume of goods transported through the Ports of Los Angeles and Long Beach invariably make use of a metric popularly known as the TEU. It stands for Twenty-Foot Equivalent Unit and is one way of measuring how much trade the ports are handling and, therefore, how competitive they appear to be.

It’s completely understandable that those who earn their livelihoods by moving containers like to keep close tabs on the number of containers they move.

But economists are more like children at Christmas. We instinctively know that it’s not the number of presents under the tree that matters. It’s what’s inside them.

So here we’ll look at trade through the Ports of Los Angeles and Long Beach from the perspective of economists, who generally prefer to use the dollar to determine the value of a business.  And what we find is something quite interesting, if not entirely counter-intuitive.

For despite the steadily intensifying competition from other U.S. seaports in the run-up to the 2015 opening of a bigger ditch through Panama, the Ports of Los Angeles and Long Beach are showing no sign of surrendering their preeminent status as America’s chief maritime gateway, at least when it comes to the value of containerized imports entering the nation’s ports.

According to Beacon Economics’ analysis of international trade data released on December 4th by the U.S. Commerce Department, the two San Pedro Bay ports handled $256.8 billion in containerized imports through the first ten months of 2013. That represents a 2.7% nominal increase over the value of all containerized imports handled during the same period last year.

More importantly, the two ports saw their collective share of the value of containerized imports entering American seaports so far this year grow to 40.2% from 39.4% last year.   

The Ports of Los Angles and Long Beach also improved their already dominant position with respect to America's transpacific maritime trade. Through October, their combined share of the value of containerized imports arriving at U.S. seaports from the Far East (including Australia and New Zealand) edged up to 56.9% from 56.0% at the same time last year.

Although the maritime industry will continue to pencil in the number of containers being shipped on their scorecards, it's occasionally helpful to look to the value of the goods inside all those TEUs.

CATEGORY: Transportation

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