Strong Demand, Smooth Sailing
Industry Experts Say They're Ready for Peak Season
March 28, 2006
A diverse panel of experts forecasted significant gains in trade at the ports of Long Beach and Los Angeles for the 2006 peak shipping season that could rival and may even surpass the growth in 2005. Even so, they said they are ready and more than capable of handling another surge in cargo.
The panelists presented their forecasts to a gathering of about 325 people Tuesday morning at the Port of Long Beach's second annual "Pulse of the Ports" 2006 peak season forecast conference.
(To view a PDF of any of the presentations, click on the name of the presenter below.)
Trade analyst Paul Bingham of Global Insight Inc. predicted another record-breaking year for Long Beach and Los Angeles ports, "but we foresee no congestion at any of the key U.S. container ports going out at least six months. We're going to see the same kind of success we saw in 2005, with congestion at a minimum."
Container cargo volume grew more than 8 percent at the San Pedro Bay ports in 2005, without any serious delays "unlike 2004 when volumes unexpectedly jumped nearly 11 percent."
Inga Kerutis of JCPenney Logistics suggested that the shipping lines schedule arrivals throughout the week to increase productivity. Peter Leng of ocean carrier OOCL (USA) Inc. said his company is ¡s "bullish and optimistic" about 2006 but warned of problems in three or four years unless productivity improves or more capacity is found.
Joe Di Massa of terminal operator Yusen Terminals Inc., and Kevin Schroeder of the International Longshore and Warehouse Union's Local 13 said the ports are ready this year because of increased hiring. The full-time union workforce has grown to more than 6,300 longshoremen, an increase of 40 percent since the 2004 logjam. The number of part-time casual workers has jumped to more than 8,300, a nearly 500 percent increase.
Roger Clarke of the L.A. Customs Brokers and Freight Forwarders Association also foresaw problems within the next few years, as security inspections are increased, possibly slowing the flow of cargo. He also said the state needs to invest in major infrastructure improvements. Brian Griley of the trucking firm Southern Counties Express said the industry faces a serious shortage of drivers because of the industry's low rates. He said drivers typically work 55 hours a week and make only $11.34 an hour.
Steve Branscum of BNSF Railway said his company also expects strong growth in 2006. To meet demand, the company is investing $2.4 billion in improvements in additional equipment and rail expansion and maintenance projects.
Sponsors of this year's conference also included the Port of Los Angeles, Pacific Merchant Shipping Association, Harbor Association of Industry and Commerce, National Retail Federation, Foreign Trade Association, Waterfront Coalition, International Business Association, Women in International Trade of Los Angeles and Orange County, West Coast Corridor Coalition, National Industrial Transportation League, Propeller Club, L.A. Customs Brokers and Freight Forwarders Association, California Marine & Intermodal Transportation System Advisory Council and Center for International Trade and Transportation.