"California's Trade Gold Rush Creates National Strain On
Good International Trade Jobs And Nightmares For Rail."
***
"International trade has been a tremendous generator of jobs in Southern California, however, the growing volumes of trade moving through our ports and airports are not just a regional problem, It is a national problem," said Executive Director Chris Becker, Orange North-American Trade Rail Access Corridor (OnTrac) J.P.A.

Los Angeles, CA - Los Angeles, CA. - A new Los Angeles County Economic Development Corporation (LAEDC) Trade Study (http://laedc.info/pdf/Trade-04.pdf) reveals that International trade activity at the Los Angeles Customs District will grow to new record levels in 2004. (http://www.MayoCommunications.com)

"The Los Angeles area trade activity is bursting at the ports and rail corridors and creating local and national trade congestion problems. Gridlock will put 28,000 good paying trade jobs annually by late 2006 at risk," says Chief Economist Jack Kyser, LAEDC.

"The value of two-way trade at the Los Angeles Customs District should increase by 11.6 percent to $262.3 billion, while the total number of containers handled at the ports of Long Beach and Los Angeles should hit 13.1 million twenty foot equivalent units (TEUs)," said LAEDC Senior Vice President and Chief Economist Jack Kyser. The LAEDC Economists at a news conference with California Secretary of Business Transportation and Housing, Sunne Wright McPeak released the results of its annual study at Union Station in Los Angeles today (Wednesday, May 5,2004). "While trade is one of Southern California's major growth industries, this growth is generating controversy and worries. There are no clear champions to articulate the benefits provided by international trade," Kyser said.

"Other states need to recognize the benefits that they are receiving from all of this activity and to support California in improving the transportation capacity, which improves service to the entire country," said Executive Director Christopher Becker of Orange North-American Trade Rail Access Corridor (OnTrac) Joint Powers Authority. "Every state in the nation gets containers moved through either Long Beach or Los Angeles, so there is the need to make sure that the nation's transportation infrastructure especially in Southern California can keep pace with the expected growth. These are issues that LAEDC and OnTrac are constantly studying."

The LAEDC study, "International Trade Trends & Impacts," focused on three major challenges that could curb future growth. The challenges are landside infrastructure, environmental concerns, and port productivity. Landside infrastructure -- is being impacted by cuts in state funding for transportation projects, and the arrival of 8,000 TEU ships at local ports.

"While people immediately think of trucks hauling containers on the 710 freeway, the local rail network is also under going serious stress," Kyser explained. "There is discussion about operating a container shuttle train between the ports and the huge distribution centers in the Inland Empire, but current track capacity is too tight to accommodate a shuttle train. In Fact our rail capacity will max out by late 2006."

Environmental concerns - Ports are coming under scrutiny on the environmental front. The LAEDC report points out that the international trade industry is facing serious problems "due to its heavy use of diesel powered trucks, trains and port equipment." Many environmentalists consider trains as the best mode for low diesel pollution per ton of cargo. Both local ports are also implementing "green" technologies, and Los Angeles has one terminal capable of "cold ironing." (The ship shuts down its diesel engine while in port and uses dockside electric power). This is an expensive process and will take time before a significant number of ships are so equipped, the study said. Port productivity -- was the third challenge highlighted in the LAEDC report? "The local ports are running out of land, and ports elsewhere along the Pacific Coast are licking their chops in anticipation of more traffic," said Kyser.

"While Tacoma and Oakland do have land available, their challenge is overcoming the lure of the large market in Southern California and the good rail connections out of Los Angeles to the mid-west and southeast. There is an effort to have more night time operations at the local ports, but this could cause problems for smaller shippers."

"In terms of total two-way international trade through the Los Angeles Customs District during 2003, it was no contest as to which nation was the region's largest trading partner," said Kyser. "China's two-way trade total increased by 24.0 percent to $68.2 billion, a new record level (not including Hong Kong). In second place was Japan, which had 2003 total trade with Los Angeles eased down by 1.0 percent to $41.5 billion. In 2000, Japan's trade through the Los Angeles Customs District was $51.8 billion, but its recession and shifts in auto production has impacted Japan's numbers. South Korea remained third in total two-way trade with Los Angeles during 2003, with an increase of 4.3 percent to $16.2 billion." Additionally, Kyser noted that several European Union (EU) nations are important trading partners with the Los Angeles area. "In 2003, Germany ranked sixth with a total of $7.5 billion, up by 16.6 percent over the previous year." The U.K. posted $4.6 billion in 2003. As to why Germany racks up such strong numbers, "think Audi, BMW and Mercedes," said Kyser.

The largest trade commodities export out of Los Angeles last year was "electrical apparatus with a value of $11.8 billion, up slightly from $11.3 billion in 2002. The second largest export was "flying devices" (Census Bureau terminology) at $4.8 billion, unchanged from 2002. "Fashion" exports out of Los Angeles were significant in 2003. Silk, wool and fabrics had a value of $1.3 billion, apparel exports were valued at $344 million, and beauty & hygiene products were valued at $660 million.

Imports through the Los Angeles Customs District in 2003 were headed up by electronic machinery valued at $26.4 billion, a sharp increase from 2002's $22.8 billion. In second place were motor vehicles at $23.0 billion, versus $21.2 billion in 2002. Apparel imports through Los Angeles totaled $12.5 billion, compared with $10.2 billion the previous year. Other "fashion" related imports included footwear ($6.2 billion), animal skin & leather ($2.5 billion), textile products ($839 million), silk, wool & fabrics ($587 million), manmade fiber ($465 million), hats ($349 million), and beauty & hygiene products at $313 million).

International trade has been a tremendous generator of jobs in Southern California, with 31,600 created during 2003 moving the annual average in the region to 475,000 jobs. The industry should continue to grow and add jobs, but this is a good news-bad news situation. "Public infrastructure is a vital yet underappreciated factor in Los Angeles's and Southern California's rapid growth and transformation into a global economy," said author Steve Erie of Globalizing L.A. Erie, who also attended the news conference, is a Professor of Political Science and Director of the Urban Studies and Planning Program at UC San Diego.

About On Trac Authority - The Orange North-American Trade Rail Access Corridor (OnTrac) Authority is a joint powers authority (JPA) similar to the Alameda Corridor Transportation Authority (ACTA). OnTrac, headed by the City of Placentia, was formed in April of 2000 to build and sustain support for the Orangethorpe Avenue Grade Separation and Trade Corridor project -a five-mile long railroad corridor project that will completely grade separate 11 rail crossings in the cities of Placentia and Anaheim.

Editors: For a copy of the Trade Trends Study click on this URL:(http://laedc.info/pdf/Trade-04.pdf) ), interviews and digital photos please call George McQuade 818.340.5300 or 818.618.9229 or Aida Mayo, 818.6187.9226]or email: PR@MayoCommunications.com.

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