Cargo jobs could drop more in 2009

The housing market isn't the only gold mine putting on the brakes in San Bernardino and Riverside counties.

The Inland Empire's logistics industry - with its blue-collar jobs infusing retail spending at local stores - experienced its biggest drop ever in job creation in 2008 because of falling container traffic coming through the seaside cargo ports in Los Angeles and Long Beach.

For 2009, "it could decline, or it could remain flat," said John Husing, regional economist and owner of Redlands-based Economics and Politics Inc., about local job creation in the goods movement business.

The ports are seeing a huge drop in imported cargo because consumers nationwide are buying less foreign-made products.

"Usually,
Cargo containers sit on the tracks Friday at the Union Pacific Railroad Yard in Rialto. A drop in container traffic coming through cargo ports is harming the local logistics industry. (Jennifer Cappuccio-Maher/Staff Photographer)
you could count on this (job sector) offsetting job declines in other areas, but you can't do that this year," Husing said.

About 38,200 logistics-industry jobs were created across the Inland Empire between 2000 and 2007 - more than 5,400 per year.

But the sector added a mere 200 jobs in 2008, Husing said.

"It's not there as a growth vehicle when we need it the most," he said.

Container traffic at the two ports dropped 19 percent for the two-month period of October and November compared to the same period in 2007, according to information published by PierPASS, a not-for-profit organization trying to reduce congestion and improve air quality around the ports.

It's likely to drop even more in the first quarter of 2009.

"Our customers are saying it may be 20 to 30 percent less than the first quarter of 2008," said Theresa Adams Lopez, spokeswoman for The Port of Los Angeles.

At its peak in 2006, the Port of Los Angeles processed 8.5 million containers.

Less than 7.3 million came through between January and November of this year, according to port data.

Because of December's estimated container traffic, which hasn't yet been released, "the numbers for the fourth quarter of this year are going to frighten people," said Jack Kyser, chief economist at Los Angeles County Economic Development Corp., a research organization in Los Angeles.

Those numbers aren't frightening Chris Ramirez, but the Fontana business owner still had to lay off almost half of his work force - 25 employees - because of a drop in cargo traffic.

Ramirez owns Ramirez Pallets, which makes new wooden pallets and repairs old ones for shipping purposes.

"All the pallets are full of inventory," he said about local logistics distributors moving goods through their warehouses. "We're preparing for the worst. People say next year will be worse."

A consumer-spending slowdown isn't the only issue for the Inland Empire logistics industry to worry about.

There's a growing consensus among economists and industry experts that the ports of Los Angeles and Long Beach won't reap the future cargo traffic boom originally expected.

That's because other ports around the nation are expanding their operations, and they don't have near as many air quality and congestion issues as the Los Angeles and Long Beach ports.

"Other ports around the country are healthy, and they do want to steal business," Kyser said. "It's something we have to look at, because we're the No. 1 port complex (in the nation)."

Husing agreed.

"Given the desire for companies to avoid L.A. and Long Beach, it'll be easier for them to choose (a different port) option in the future," Husing said. "I'm not optimistic about the ports of L.A. and Long Beach coming anywhere near the kind of growth needed for the sake of the inland economy."