This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
US West Coast ports enter 2020 facing a significant challenge to win back discretionary cargo from East and Gulf coast ports.
Over the past 15 years, competitors have steadily chipped away at the West Coast’s market share of Asian imports. Nowhere has the drop been more significant than at the Los Angeles–Long Beach port complex — the nation’s largest — which has seen its market share of Asian imports plummet by nearly one-fifth, from 56 percent to 46 percent, during that time.
The stakes are high not just for West Coast ports themselves, but for the communities they support. Ports are a huge economic driver. In Southern California alone, the ports of Los Angeles and Long Beach support 179,000 jobs and represent more than 30 percent of the region’s $1 trillion gross metropolitan product, according to a recent PMA-commissioned study led by Michael Nacht, professor of public policy at the University of California, Berkeley.
The coastwide numbers are much larger. Another study for PMA conducted by Mercator International concluded that continued cargo declines in Southern California could lead to significant financial shortfalls, creating real exposure for the Alameda Corridor and the ports of Los Angeles and Long Beach.
Accelerating our work to create cost-effective, productive terminals that place a premium on efficient operations is crucial to regaining lost market share and supporting local economies. Modernizing terminals — and in some cases introducing automation — will be the driving force in helping West Coast ports win back business. And beyond the competitive advantage, modern and efficient terminals have the added benefit of cleaning the environment and creating healthier communities.
Simply put, modern, efficient, customer-focused terminals attract discretionary cargo. And cargo creates economic benefits for longshore workers, their families, and local communities up and down the West Coast. We will apply every available resource available to us to keep these vital economic engines humming.