Southern California dominance in international trade is likely to continue, report says

The Los Angeles Customs District, which includes the Los Angeles and Long Beach seaports, is expected to remain the nation's preferred gateway for international trade in 2011. It will handle about $372.8 billion in imports and exports this year, an increase of 7.5% over 2010, according to a new report by the Los Angeles Economic Development Corporation.

The report, International Trade Trends: The Southern California Region Review and 2011 Outlook, was officially released Monday at midnight. It contains a number of positive indicators about the effect of trade on the Southern California economy.

In 2010, the Los Angeles Customs District handled $346.9 billion in imports and exports, good enough to maintain its No. 1 ranking in the U.S. New York, the No. 2-ranked customs district, handled $326.3 billion in goods that year. It was followed by third-ranked Detroit, at $218.1 billion; fourth-ranked Houston, with $211.5 billion; and fifth-ranked New Orleans, at $191.2 billion, the LAEDC report said.

The LAEDC estimated that the Los Angeles and Long Beach ports, which rank first and second, respectively, in the U.S. in the number of cargo containers they move, will handle about 14.8 million containers in 2011, an increase of 5.2% over 2010.

Job growth will lag behind those numbers, however, the report said, as cautious employers restrict hiring and demand more from existing workforces. In Los Angeles, Orange, San Bernardino, Riverside and Ventura counties, international trade will account for 516,600 jobs in 2011, up 2% from 506,500 trade jobs in 2010, the report said.

The report said that it was too early to judge the effect of a newly expanded Panama Canal, which will be able to handle larger ships that normally would have had to stop at ports on the U.S. West Coast. The expanded Panama Canal is set to open in 2014 and could divert some cargo and jobs from Los Angeles and Long Beach.

The report's principal author, LAEDC Chief Economist Nancy Sidhu, said Los Angeles and Long Beach were working hard to maintain a competitive advantage.

"A number of key infrastructure and terminal expansion projects are underway" at the two ports, Sidhu said, "so we'll have the capacity to handle more volumes in the future."

The report said there were some potential challenges on the horizon, such as the effect of high oil prices. That's in spite of oil prices having recently fallen 15% from their April peak.

"High and volatile oil prices could dampen the pace of international trade growth in 2011 and certainly will boost transportation costs of freight carriers and possibly rates paid by shippers," the report said. "Ocean carriers, for example, are paying nearly three times as much for bunker fuel as they were a year ago."

Bunker fuel is what the world's freight ships run on for most transoceanic voyages.

-- Ronald D. White

Photo: Hal Burkey, Long Beach Container Terminal maintenance and repair manager, watches a crane operator load containers onto the Orient Overseas Container Line Tianjin of Hong Kong. Credit: Allen J. Schaben / Los Angeles Times