The Ports of America: Long Beach and Los Angeles Ports see Massive Drops in Cargo. The Concrete Mouth of Consumerism.

The port of Los Angeles and Long Beach are the two busiest ports in the United States.  The port of Los Angeles is located in San Pedro Bay which is only a few miles away from the port of Long Beach.  Make no mistake, these two ports are incredibly busy ports that provide the spine to a large portion of consumption goods used by many Americans.  The port of Los Angeles employs 16,000 workers directly and sits on 7,500 acres.  The port of Long Beach is situated on 3,200 acres.

The port of Long Beach has 7.31 million twenty-foot equivalent (TEU) coming in each year (data from 2007).  The port of Los Angeles has 7.3 million TEU coming in (data from 2005).  Combined both ports bring in roughly $300 billion worth of cargo each year.  That is a massive amount of goods coming in.  So it is a good barometer to look at the data of the ports to see how consumers are dealing with the economic crisis hitting our country.

The goods range from low priced goods to expensive luxury cars.  The range of products are wide and diverse.  Let us take a look at some port stats for the current year:

port-of-long-beach-data

This is a significant drop in the amount of loaded TEUs coming into the Long Beach port.  If you look at the February numbers, they are off by 40 percent.  What this means is there has been a contraction of goods by nearly a half.  These TEUs are more recognizable as big rigs and trucks on the roads of America.  A drop by half shows the demand destruction for many goods on the market.

long-beach-port

The top trading partners for the port of Los Angeles are as follows:

China – $68 billion

Japan – $24 billion

Taiwan – $10 billion

Thailand – $6.7 billion

South Korea – $5.6 billion

What this means is you can expect to see massive pull backs in these countries as well since we are large trading partners with them.  It would only make logical sense if demand is off by half, that we would see contractions ripple through the global economies especially those in Asia.

port of la

As mentioned before, these ports support many jobs in the region.  The City of Long Beach through its port supports more than 30,000 jobs (roughly 1 out 8 jobs).  With Los Angeles, the port operations support more than 230,000 jobs in direct and ancillary services.  Hundreds of thousands of jobs depend on the ports and this demand destruction will only put more pressure on a state of California where the unemployment rate is already at 10.1 percent.

The remedy is simply buying more stuff yet the driving force of consumption is waning.  That is, Americans need to be buying more stuff but buying stuff is what brought on this economic contraction in the first place.  The ports are significant early indicators of how things are going.  This massive drop is very telling.

I think many fail to look at the ports because they are really under reported in the media.  Yet these are the doors to the consumption of Americans.  If you don’t have guest coming to the party, then why buy lots of food?  These ports, number one and two in the nation give us a first-hand look at what is occurring on a global scale.  Until these numbers rebound, talk of a stabilizing market is largely speculation.

RSSIf you enjoyed this post click here to subscribe to a complete feed and stay up to date with today’s challenging market!

TAGS: , , , , ,




3 Comments on this post

Trackbacks

  1. Tran Harry said:

    Great post, definitely a good indicator of how our consuming nation is doing as a direct result of demand on imports.

    March 20th, 2009 at 5:38 pm
  2. FrugalCalifornian said:

    Thanks for a good look at what is as mentioned in the article an often ignored but very significant barometer of commerce. I lived in Huntington Beach, CA in the 80s and completed a trade school course in “International Trade & Transportation” in the hopes of working for a Customs House Broker, but stuck with my digital communications field career with the local telephone company (GTE now Verizon). Maybe it was for the best after all, but the west coast’s World Trade Center in Long Beach was just completed and incredible amounts of goods were entering through ports of L.B. & L.A. at the time. I got a great education from my Dutch born teacher at least in the functions of trading goods between countries. I’ve now come to cheer and actually support trade with Japan, Taiwan and So. Korea especially since these are our asian allies on the eastern pacific. I’d much rather purchase goods from them than from less stable and more threatening south-of-our-border countries who pretend to be our neighbors and therefore our friends.

    March 20th, 2009 at 10:50 pm
  3. abhijeet said:

    i want port wise details in usa

    September 23rd, 2009 at 10:34 pm

LEAVE A COMMENT

Subscribe Form

Subscribe to Blog


Enter your email address to receive updates from My Budget 360:

100% Private & Spam Free.


Popular – All Time

  • 1. How much does the Average American Make? Breaking Down the U.S. Household Income Numbers.

  • 2. Top 1 Percent Control 42 Percent of Financial Wealth in the U.S. – How Average Americans are Lured into Debt Servitude by Promises of Mega Wealth.

  • 3. Is college worth the money and debt? The cost of college has increased by 11x since 1980 while inflation overall has increased by 3x. Diluting education with for-profits. and saddling millions with debt.

  • 4. The Perfect $46,000 Budget: Learning to Live in California for Under $50,000.

  • 5. Family Budget: How to go Broke on $100,000 a year. Why the Middle Class has a hard time Living in Expensive Urban Areas.

  • 6. Lining up at Midnight at Wal-Mart to buy Food is part of the new Recovery. Banks offering Mattress Interest Rates. The Invisible Recovery Outside of Wall Street.

  • 7. You Cannot Afford a $350,000 Home with a $75,000 Household Income!

  • 8. Crisis of generations – younger Americans moving back home in large numbers. Student loan default rates surging largely due to for-profit college expansion.

  • 9. The next massive debt bubble to crush the economy – 10 charts examining the upcoming implosion of the student loan market. $1 trillion in student loans and defaults sharply increasing.

  • 10. Welcome to the new model of retirement. No retirement. In 1983 over 60 percent of American workers had some kind of defined-benefit plan. Today less than 20 percent have access to a plan and the majority of retired Americans largely rely on Social Security as their de facto retirement plan.
  • Categories



    wordpress stats