This week I was fortunate to be able to attend the Center for International Trade & Transportation’s Tenth Town Hall meeting, which I wrote about a couple of weeks ago. I must say it lived up to its billing, seamlessly combining all the themes in its title and more. I’m also happy to observe that like past Town Halls, it was extremely well attended.
I’ll highlight two parts of the program from which I learned the most: Paul Bingham’s presentation, and the panel discussion. This is not to minimize the video, which was educational and extremely well produced. The full program, video included, was taped and the file will be available after March 19 at www.amp.csulb.edu/uces/citt. The video can also be purchased for use in other venues; contact the CITT staff through the link in the first paragraph.
Paul’s report on the global economic slowdown and its impact on Southern California’s trade and container volumes was gloomy in the near term but optimistic in the longer term. Paul observed that normal business boom-and-bust cycles – clearly visible in his charts – are not “repealed” by the bursting of an economic bubble. This reassured me greatly. He also was optimistic that domestic and global stimulus efforts will be effective in sparking economic recovery. He didn’t think we were likely to be in for a second “Great Depression” or a “lost decade” like that experienced by Japan in the 1990’s.
Now for the gloomy part. This year and next are going to be pretty tough for international trade. U.S. unemployment – with over 7 million jobs wiped out – is the worst ever seen by the current generation of economists, and it won’t peak until 2010. (Yikes.) The country’s imports and exports are both projected to drop by double-digit percentages in the coming year. Stimulus spending, while helpful, won’t meet all our domestic transportation infrastructure needs, meaning that we still need creative new thinking in our next federal transportation bill. Paul speculated that some port customers could fail, with most already in survival mode, looking for the cheapest possible transportation options for cargo that is still moving.
The panelists built on these themes, conveying eloquently how the profusion of port programs unique to Southern California is making the once-solid market position of our ports more wobbly. Representatives of the shippers, ocean carriers, terminal operators, railroads, and trucking industry were unified in their assessments. A great deal of cargo has historically come here, and will continue to come here, to serve the enormous local market, but a good portion – arguably as much as fifty percent – is discretionary, meaning the supply chain can lead through other ports to the goods’ final destination. Programs such as PierPASS (night access paid for by daytime fees), the Clean Truck Program (involving fees enacted last month), and a possible infrastructure cargo fee all have extremely important goals, particularly relieving air pollution and congestion. Nonetheless, as the panel made clear, they are creating financial stresses and uncertainty in this downturn. When possible, shippers are increasingly choosing to avoid the “hassle” of Southern California, and we can be sure that other ports, especially in the U.S. and Canada, are eager to relieve us of our cargo.
Despite all the straight talk, I didn’t leave the event discouraged. In fact, the event organizer, Marianne Venieris, observed at the start that “a crisis is a terrible thing to waste,” and I think we have just that opportunity here. The union (ILWU) participants asked great questions, and one former union official suggested that we unite in our adversity and approach Washington with a single voice representing labor, the industry, and the community. A panelist responded that we have no choice but to do so. I look forward to working with my colleagues in all these arenas to continue the excellent dialogue from the Town Hall and to agree on common goals that will get us quickly through crisis to recovery.