West Coast Ports Labor Dispute Gets Closer To Safe Harbor!

OnTrac rail study reveals that the combined 10-day shutdown and 23-day backlog disrupted trade valued at $6.28 billion just at the LA basin ports. The impact will be felt across the United States, every area of which is served by the Ports of Los Angeles and Long Beach via a massive trade corridor network. Nationwide, the $6.28 billion in disrupted trade sustains almost 65,000 jobs and $525 million in state and local taxes. Economists say lost business of 15-25% of trade value disruption figures in the ballpark.

Los Angeles, CA- Americans can breathe easier if a West Coast dockworkers committee approves an agreement between West Coast shippers and longshore union workers on December 9th. The six-month negotiation appears to be close to a resolution based on a tentative agreement reached over the weekend and submitted for final approval by the unions oversight committee.

Im just glad they were able to settle this thing without another shutdown or before local business and consumers got washed out to sea", said Senior Vice President of Economic and Public Policy Wally Baker, Los Angeles Economic Development Corporation (LAEDC). The LAEDC today (Nov. 25, 2002), released new estimates as part of the OnTrac rail study placing the total trade disruption cost at $6.28 billion for just the two Los Angeles basin ports. This represents about two-thirds of the total trade value interrupted by the West Coast ports dispute."

According to longshore union and shipping company representatives new technology improvements, a major sticking point, were included in the final contract. National transportation consultants predict that the implementation of the new agreement will greatly increase productivity at West Coast ports but pave the way for congestion problems in trade corridors across the country.

These productivity improvements increase the output of our ports and are going to be great initially," explained Baker, but after they get implemented, Californias trade corridors and the trade routes to the Midwest, East Coast and Southern United States are going to be in hot water. There was already a lot of trade congestion on rail corridors in the heartland before the productivity improvement at the ports. Our studies of just the LA basin rail corridors forecast about a four-year capacity on Southern California

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rail corridors, but that was before the new technology agreements. The changes will improve the ports productivity, which is a good thing, but it will also increase the number of trains moving through the nations corridors. I know Chicago, New York-New Jersey, and many, many other areas of the country are already in serious trouble with corridor capacity constraints. Increased efficiency on the West Coast is going to lead to serious rail congestion if we dont address the corridor capacity problem."

The OnTrac Trade Impact Study is an encyclopedia of US trade data that analyses all international trade moving to and from each of the 435 US Congressional Districts via the Los Angeles area ports, the OnTrac Corridor, and other basin trade routes. The Los Angeles and Long Beach ports are together the 3rd largest port complex in the world and connect to the OnTrac rail project in northern Orange County California. The study identifies $196 billion in annual trade through the LA basin ports and corridors during the year 2000 or about two-thirds of all west coast waterborne trade flows. The other West Coast ports combined are estimated to represent the additional one-third or $100 billion in trade annually.

We can see how important trade is to all of the country as a result of this dispute. Sometimes it takes a crisis to help us appreciate how much money, taxes and how many jobs are tied to waterborne trade," said Ken Ackbarali, vice president and senior economist, at LAEDC. The OnTrac Trade Impact Study was designed to help members of Congress better understand why corridors and ports are one integrated system and cannot be separated from their economic benefits."
Ackbarali, an economist with expertise in international trade, explained, a 75-85% recovery rate for trade disruption and congestion costs by importers and exporters is a good yardstick. Recent quotes of a cost of $1 billion per day for all West Coast ports during the 10-day shut down is a reasonable estimate if understood specifically as a business disruption or trade congestion cost. However, the billion dollars a day figure does not represent permanent lost business. The permanent business loss for just the 10-day shutdown was probably closer to $150-250 million daily for all West Coast Ports. Thats a very big number for lost business!"

The next phase of the OnTrac study is also underway. Baker adds, We still have a big job ahead of us with this study. In the second phase of the study, LAEDC economists and the RAND Corporation are working together on the economic impact of homeland security on the OnTrac Trade Corridor as well as our ports of entry." The homeland security phase of the study is planned for completion in late January 2003.

The OnTrac Trade Impact Study, commissioned last year by the OnTrac rail project, located in Orange County California, mapped products throughout the country to all 435 Congressional Districts. The state-by-state spreadsheets, (http://www.laedc.org/) or (http://www.mayocommunications.com) charts and graphics, and audio clips (.mp3) are available to the media. They show how all US Congressional Districts benefit from economic activity related to products moving through the ports and trade corridors system.

The study also reveals that LA local ports and trade corridors move more than $196 billion annually or $537 million per day of products and commodities to and from every part of the country. The study looked only at cargo that went through LA area corridors and ports in 2000. Here are the State annual benefits and estimated cost of the disruption for both the 10-day shutdown and the 23-day backlog:

International Trade Moving viaPorts of Los Angeles and Long Beach and Trade Corridors(Millions of Year 2000 Dollars)

   Annual    Trade
State   Total   Disrupted
California   $92,815.50    $2,969.8
New York   $15,962.20    $510.7
Texas   $11,827.50    $378.4
Illinois   $11,748.50    $375.9
New Jersey   $10,747.60    $343.9
Tennessee   $4,667.80    $149.4
Michigan   $3,602.70    $115.3
Georgia   $3,544.70    $113.4
Ohio   $3,475.00    $111.2
Arizona   $3,259.90    $104.3
Missouri   $3,128.00    $100.1
Minnesota   $3,092.40    $98.9
Massachusetts   $2,817.50    $90.2
Indiana   $2,597.50    $83.1
Florida   $2,053.10    $65.7
Pennsylvania   $2,022.00    $64.7
Kentucky   $1,784.80    $57.1
Washington   $1,743.10    $55.8
North Carolina   $1,599.90    $51.2
Wisconsin   $1,480.70    $47.4
South Carolina   $1,387.50    $44.4
Colorado   $1,231.60    $39.4
Kansas   $984.80    $31.5
Alabama   $865.00    $27.7
Virginia   $847.20    $27.1
Connecticut   $806.80    $25.8
Arkansas   $707.70    $22.6
Nebraska   $695.90    $22.3
Louisiana   $680.90    $21.8
Maryland   $486.60    $15.6
Utah   $483.30    $15.5
Mississippi   $452.10    $14.5
Oregon   $422.10    $13.5
South Dakota   $373.60    $12.0
Iowa   $366.40    $11.7
West Virginia   $337.80    $10.8
Oklahoma   $299.10    $9.6
Rhode Island   $276.30    $8.8
Nevada   $136.30    $4.4
Delaware   $132.80    $4.2
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International Trade Moving viaPorts of Los Angeles and Long Beach and Trade Corridors(Millions of Year 2000 Dollars)continued
State   Annual Total   TradeDisrupted
District of Columbia   $115.60    $3.7
New Hampshire   $98.80    $3.2
Maine   $86.30    $2.8
New Mexico   $31.60    $1.0
Hawaii   $30.50    $1.0
Idaho   $24.50    $0.8
Vermont   $15.50    $0.5
Alaska   $9.50    $0.3
Montana   $7.90    $0.3
Wyoming   $5.40    $0.2
North Dakota   $5.00    $0.2
United States   $196,374.60    $6,283.4
Note:     Figures include data for ports of Los Angeles and Long Beach only. For                state-by-state jobs and tax impacts, see www.laedc.org. Sources: OnTrac Trade Impact Study; November 2002                BST Associates (Bothell, Washington)                Los Angeles County Economic Development Corporation

Note: The LAEDCs results being released this week (Nov. 25, 2002) are from a yearlong study for the OnTrac Joint Powers Authority. LAEDC collaborated with BST Associates on this study due to the firms vast knowledge of port and corridor issues. The LAEDC and OnTrac rail project have also worked closely and received a great deal of assistance from the Port of Long Beach, California.

For more details and background on OnTrac visit http://www.ontrac-jpa.org/ and for a breakdown of the study visit www.MayoCommunications.com.

For interviews call Aida Mayo, MAYO Communications, 818.340.5300 or 818.618.9226
or Wally Baker, LAEDC at 213.236.4812 or 213.447.2269, Ken Ackbarali, LAEDC, 213.236.4816 or George Young at 310.822.0370.

For more details on the products flowing in and out the L.A. and Long Beach Ports
contact MAYO Communications at 818.340.5300 or 818.618.9226 or extremepr@MayoCommunications.com.

For interviews with Wally Baker after 4 a.m. PDT call: 419.363.2573