It’s been a good week to take stock of our regional goods movement situation. There’s no question that the economic downturn has slowed the flood of cargo through the Ports of Los Angeles and Long Beach. Overall, containerized cargo volumes are down roughly 20% from their peak in 2006. Are we seeing fewer trucks on the 710 freeway? It depends when you travel, but it looks to me like the trucks aren’t quite so wall-to-wall these days. They’re certainly not gone, though!
Global trade expert Paul Bingham was in town this week and provided a snapshot of the latest port growth forecast. Both San Pedro Bay ports updated their full forecast in 2007, but requested a new update this spring in light of the global economic situation, which hadn’t been foreseen. The bottom line is that port cargo will resume its growth, probably in 2010, but from a lower base than before and at a slower rate of growth. Cargo volumes that were once thought to be coming by 2023 are now projected to arrive about a decade later, in 2035. Our loss of cargo business (market share, not overall volume) to other ports in the U.S., Canada and Mexico is an underlying trend that predated the recession and could continue even as the global economy comes back to life. New rules and limits on credit and financial markets make it unlikely that previous consumption levels will return. Perhaps most depressing, Paul estimates that our economy has been set back four to six years compared to where it would have been without the recession, and that a permanent loss of production capacity has left us all poorer.
Slower growth, however, is still growth, so we are still obliged to plan for it. Among infrastructure planners, the downturn is seen as a kind of “breather,” giving us extra time to build consensus about projects and priorities. I am heartened by new signs of collaboration between coastal areas and the Inland Empire, where so much of our port freight is handled. I have believed for a long time that we need a regional consensus vision of what our freight system should do for us – how efficient, fast, quiet, and pollution-free it should be, even what it should look like. I think we may be able to get the stakeholders together to develop that vision. I also believe that the most constructive course by far is not to let the goods movement industry and its growth go elsewhere, but to keep it here and clean it up. This will create far more local prosperity and environmental quality than the alternative.
In the meantime, we continue to develop plans for the I-710 freeway, knowing that growth will return. The amazing and complex public participation process continues, with the Corridor Advisory Committee meeting this week to get updates on the environmental studies now underway. The environmental team is currently developing a community profile for each city and neighborhood along the corridor, in order to ensure that the existing community conditions, assets, and concerns are fully understood. The unique public participation structure for this project is an unprecedented attempt to provide a voice in the decision-making process for each affected community. It functions under many constraints – financial, time, regulation, and policy – but at each meeting I am impressed with every participant’s commitment to the integrity of the process and the value of the outcome. Viewpoints range from practical to visionary, and all are heard.
How do we pay for all this infrastructure? It will have to be by a combination of means, but it appears that we can expect some help from the federal government. Congresswoman Laura Richardson was also in town and spoke to the Foreign Trade Association Monday about several bills she has pending that would address both the infrastructure and environmental impacts of goods movement. Her MOVEMENT Act would establish a dedicated funding source for infrastructure that moves freight, improving on the current situation where freight projects (like our Gerald Desmond Bridge) must compete with many others for scarce federal dollars. The Act is designed to ensure that fees collected in an area stay in that area to be invested in local infrastructure. Another bill, the Clean Ports Act, would provide additional funding for port environmental programs, and is inspired by our local ports’ efforts. If it passed, this bill might bear out one of Paul Bingham’s predictions: that environmental controls on freight operations will become national standards, and that demand for “all-green” freight services is likely to grow.
It’s not always easy to be optimistic, especially in times like these. However, I am fortunate to be a natural optimist, and what I’ve heard and seen this week confirms my expectation that we will rise to the goods movement and environmental challenges that face us.