Shipping Ports Feel Economic Downturn Firsthand
RENEE MONTAGNE, host:
When the economy downshifts, or alternately revs up, among the first places to feel it are the neighboring ports of Los Angeles and Long Beach. That's because they receive about one-third of all the goods shipped into the country. And NPR's Ina Jaffe reports that when business there is down, the impact ripples across Southern California.
INA JAFFE: Want a Mercedes? You might be able to get a real good deal right now. There are acres of them parked fender-to-fender at the port of Long Beach.
Mr. ART WONG (Spokesman, Long Beach Port): Ordinarily, the cars come through the port in there, and they're moved out of here within a few days, a week at the most.
JAFFE: Says Art Wong, a spokesman for the port. But with business down, he says, these cars have nowhere to go.
Mr. WONG: So some of them have been here a month, or maybe even much more than a month.
JAFFE: The side-by-side ports of Long Beach and Los Angeles are the nation's busiest. Both experience double-digit growth in traffic year after year.
Mr. WONG: Since the early 1990s, our trade volumes probably have quadrupled.
JAFFE: But that's now come to a screeching halt. This year's imports are down about 10 percent. But dockworker Esther Hudack's(ph) income is down way more than that.
Ms. ESTHER HUDACKS (Dockworker): In 2006, we were averaging about four or five shifts a week. And this year, right now, I'm going about 20-25 days between shifts, so not a lot of work at all.
JAFFE: Maybe just a couple of shifts a month. Hudack is what's known as a casual. That's a part-time dockworker at the bottom of the pecking order hoping to pile up enough seniority to be next in line when a permanent position opens up. Hudack says in this economy that's not going to happen anytime soon. Meanwhile, she is cobbling together a living any way she can.
Ms. HUDACKS: I do daycare at a preschool. I clean houses. I work with my dad, who is an electrician, helping him pull wires, things like that.
JAFFE: Much of the cargo that Hudack and her fellow longshore workers take off the ships is moved out of the ports by truck. At a gas station near pier D, trucker Robert Garcia(ph) says he used to work up to 60 hours a week. Now it's usually just 30 hours, 40 if he's lucky.
Mr. ROBERT GARCIA (Truck Driver): I'm kind of afraid right now that I might lose my home. I'm trying to look for another job, but everywhere I go they're not hiring. And if they're hiring, they're paying a lot less. So it is difficult.
JAFFE: A lot of the truckers leaving this port will drive their cargo 50 miles or more to warehouses in what's known as the Inland Empire. That's east of L.A. in San Bernardino and Riverside counties. Distribution and warehousing have become one of the area's most important industries.
Dr. JOHN HUSING (Economist): Because it's the part of Southern California with large quantities of dirt.
JAFFE: Says John Husing, an economic analyst and an expert on the Inland Empire. The huge unoccupied tracks of land, he says, were good for building not only warehouses, but residential subdivisions. But now that industry has gone bust, and at the same time warehousing has lost hundreds of jobs.
Dr. HUSING: Normally, it's a sector that's adding four or five thousand jobs a year. It was bulletproof. At exactly the moment when you're losing construction jobs, to simultaneously have this sector go flat is definitely not helpful.
JAFFE: The warehouses in the Inland Empire are vast. This one is 580,000 square feet, or about 13 acres, and there are some more than twice this size. But we could not find operators of warehouses of any size who wanted to publicly acknowledge the trouble they're in. Cargo volumes are down about 10-20 percent, according to Larry Hogan(ph) who's on the board of an industry trade association.
Mr. LARRY HOGAN (Trade Association Board Member): In distribution operations, warehouse operations, most of the fees are generated through handling cost and space storage. Without volume, there's no handling. And if there's no volume, there's no storage, so the space is empty.
JAFFE: And the empty space still costs the operator in rent, insurance, and so on. The one thing that might fill up some of that space in the near future, says Hogan, is if the holiday shopping season is so bad that retailers return a lot of goods to the overseas manufacturers, but that would be a sign that the real economic recovery could be a very long way off. Ina Jaffe, NPR News.