Friday, June 03, 2005 | Will California’s seaports, airports, roads and warehouse facilities be modernized and expanded? Will blue collar workers capable of being trained to use new equipment be available to accommodate the growth in international trade? Will California continue to lose international cargo business to states which are building transportation infrastructure to meet the demand for international cargo movement?
Will California’s population experience increased transportation delays, gridlock, environmental pollution and skyrocketing costs, or will it embrace the challenge of transportation infrastructure modernization to improve the quality of life?
These questions were the focus of the 2005 San Diego World Trade Center Global Logistics Symposium, “Trade Visions 2005 – A Region in Motion: Land, Sea, Air,” held at the San Diego Convention Center on May 18, 2005.
“Logistics” is defined in Webster’s New World Dictionary as “the branch of military science having to do with procuring, maintaining, and transporting material, personnel, and facilities.” Had the “special consultants and contributing editors” who compiled the New World Dictionary in 1989 attended the 2005 San Diego World Trade Center Global Logistics Symposium, they might have defined “logistics” as the study of cargo movement and all functions and operations associated therewith by land, sea and air.
Symposium speakers from the “logistics” industry, government and academia said that improved transportation infrastructure and workforce training is critical to California’s economic well being, quality of life and environment. Dr. John E. Husing (a symposium speaker whose professional life is largely devoted to California’s economy) said that the logistics economic sector is capable of replacing high paid manufacturing jobs with progressive skill and compensation ladders lost by a decline in California’s “… seven manufacturing sectors: aerospace, electronics, other durables, computer & peripherals, machinery, fabricated metals, other non-durables, plus the defense and non-defense federal government.”
Construction of highway lanes dedicated to truck traffic, roads which go under or over existing intersections with rail tracks, and high speed rail connections were mentioned as projects under consideration to relieve congestion on California highways, to reduce emissions from idling diesel powered tractor trailers, and to improve safety. “Smart” containers with global positioning satellite and other sensors to track their location, to record their movement and determine whether they were opened at unscheduled locations or times, bar code tracking, robotics and enhanced communications are either in use or under development to speed and secure movement of cargo between land, water and air carriers.
Husing credits economic growth in China, Japan, India, Korea, Malaysia and Singapore as a significant reason for the projected increase in the volume of standardized cargo containers moving through the Los Angeles/Long Beach port. Between 2000 and 2010, the Southern California Association of Governments forecasts an 80.6 percent increase in the number of standardized cargo containers moving through Southern California ports from 9.5 million to 17.1 million.
Growth in e-commerce reflected in reports from Forester Research, a specialist in technology issues, indicates that United States online sales went from $51.3 billion in 2001 to $72.1 billion in 2002 – a 41 percent increase. E-commerce growth is another factor that Husing points to as driving the increased demand for transportation and distribution services.
The Los Angeles/Long Beach and Seattle/Tacoma harbors are the only two West Coast ports between Alaska and Chile that can be used by super-cargo “post-Panamax” ships with a 4,000 standardized cargo container capacity. The ability to off-load, move, unload, store and distribute cargo from these ships requires expansion of California’s transportation infrastructure. Delays increasing costs for cargo movement at the Los Angeles/Long Beach port such as those extant during the 2003 longshoremen labor unrest, and the 2004 arrival of too many ships in a single time period with cargo for distribution prior to the Christmas holidays are motivating mega importers Wal-Mart and Home Depot to invest in warehouse facilities in less expensive states such as Georgia. Consultant Jock O’Connell, a symposium presenter, indicated that the Port of Savannah and other ports on the East Coast and Texas coast are being considered as alternatives to Los Angeles/Long Beach because of increased costs and delays.
The development of larger capacity airplanes with greater range by companies such as Airbus will impact the demand for cargo services at California’s airports. O’Connell said that new aircraft will expand the number of U.S. cities with direct air cargo service to Asia. This development allows shippers to bypass the Los Angeles and San Francisco airports. He pointed to a study by economist Jon Haverman published in April 2004 by the Public Policy Institute of California to illustrate the decline in U.S. trade handled by California gateways. The Haverman study reveals that from 1974 to 1995, the share of U.S. trade coming through California had doubled, but has been diminishing ever since.
Professor Stephen Erie from the University of California, San Diego (a moderator of a symposium panel on international air trade) and author of “Globalizing L.A.: Trade Infrastructure, and Regional Development,” said that the emergence of Los Angeles as an international trade destination is attributed to massive investments by civic entrepreneurs in the early decades of the 20th century. These investments developed the seaport on the shore of San Pedro Bay and built Los Angeles International Airport.
O’Connell sees competition for limited public funds and the existence of political and legal tools to stop transportation infrastructure construction projects as serious obstacles to improvements needed to keep California competitive with other states seeking to attract international trade. Voter rejection of airport construction in Orange County, and the recent election of Los Angeles Mayor Antonio Villaraigosa on a platform which opposed expansion of the Los Angeles International Airport indicate that transportation improvement projects are likely to be rejected because they are unpopular.
Rejection of needed transportation infrastructure improvements comes at a cost which ultimately may prove to be more unpopular than the investment and inconvenience advanced as reasons for the rejection. San Diego’s inability to modernize its airport and seaport facilities is estimated in Erie’s book to cost business $4 billion to $5 billion annually in added transportation costs, and to make San Diego less attractive to companies focused on global trade.
Raising public awareness that economic prosperity and quality of life improvement requires acceptance of seaport, airport, road, rail and warehouse construction projects is perhaps the greatest challenge identified in the symposium. The symposium provided a valuable forum to bring this timely message to Californians.
Leonard Krouner is a San Diego-based consultant, writer and professional in dispute settlement who can be reached at (858) 277-5323.