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L.A. bursting at trade seams

Annual record of $302.1 billion projected

By Gregory J. Wilcox, Staff Writer

The value of international trade through the Los Angeles Customs District, the nation's biggest, should hit a record $302.1 billion this year but the powerful sector faces tough challenges, chief among them congestion, according to a forecast that will be released today.

It will be the third consecutive dollar volume record, an anticipated increase of 14.3 percent, while the number of containers moving through the district will increase 9.9 percent to 14.4 million units, a new high for the fourth year in a row, according to a forecast from the Los Angeles County Economic Development Corp.

The majority of that activity occurs at the ports of Los Angeles and Long Beach but also includes Ontario and Los Angeles international airports, McCarran Field in Las Vegas, Port Hueneme in Ventura County and small oil terminals along the coast.

The report will be released today at a breakfast that kicks off International Trade Week, an event that started here 79 years ago.

"The Los Angeles area is a major international business center and one of the key pieces of infrastructure for the United States international trade industry," said Jack Kyser, chief economist at the nonprofit economic development corporation.

International trade is the county's biggest employer and accounts for the second-most jobs in the five-county region. It takes place in all of the counties but the direct dollar contribution cannot be measured, economic development executives said.

"It's got an enormous impact out here. I wish I had a number," said Bruce Ackerman, president and chief executive officer of the Economic Alliance of the San Fernando Valley. "The problem we have is you don't see international trade."

One number stands out, though. Ackerman said that about 3,500 companies in the Valley are involved with the export side.

It's more visible in places like Long Beach, where trucks leave the port and clog the 710 Freeway, and in the Inland Empire, where huge warehouse facilities have been built for major retailers and automakers' distribution networks.

Economist John Husing, owner of the consulting firm Economics & Politics Inc., tracks the Inland Empire and said it's seen a surge in trade-related jobs. For example, there is now 300 million square feet of industrial space in the region and much of it is used to transition goods from the ports to other parts of the country.

"The only thing you can say is that it's big and growing," he said.

It's a good-paying sector, too. For example, in Southern California during 2003, international trade wages averaged $45,314 a year, manufacturing $43,871 and construction $40,439.

So international trade is a critical way to grow blue-collar jobs as manufacturing contracts, he said.

The trade growth spurt started in 1994 when the Los Angeles district surpassed New York as the nation's biggest. It's been that way ever since.

But the district fell from third to fourth place in the world ranking last year behind Hong Kong, Singapore and Shanghai. And imports continue to far outpace exports.

Growth is not going to slow here, though. Port officials predict container traffic between 2000 and 2020 will quadruple to 36 million units a year.

That will continue to add to the congestion at the port, on the freeways and railroad lines that branch out from downtown Los Angeles through communities across the region.

Last October, for example, 93 ships were tied up in San Pedro Bay waiting to unload Christmas cargo. "That just terrified the retail industry," Husing said.

Expansion is necessary, most agree. The hard part is figuring out how to do it.

"The biggest challenge is managing the growth ... balancing it with the community and environmental interests," said Richard D. Steinke, executive director at the Port of Long Beach.

One opponent has been the National Resources Defense Council, which is concerned about port expansion. But the council says it does not have a no-growth stance.

It did sue the Port of Los Angeles over the expansion of the China Shipping Terminal.

The organization recommends plugging ships into dockside generators so their diesel engines can be shut down while unloading.

"We don't oppose thoughtful port expansion that protects local communities from worsening diesel pollution and smog, which cause cancer, asthma and other serious ailments," said Julie Masters, an air quality lawyer at NRDC, in a statement.

Gregory J. Wilcox, (818) 713-3743 [email protected]

A snapshot of the local international trade sector:

The sector added 42,600 jobs last year, totaling 404,600 workers.

China was the biggest trading partner, totaling goods valued at $85.6 billion, up 25.4 percent. Imports totaled $75.7 billion.

Electrical products valued at $10.9 billion was the biggest export commodity.

Electronics, valued at $31 billion, was the biggest import commodity.

Source: LAEDC
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