The Port of Oakland and the rest of the state were given some good news last month about exports in the year’s first quarter.
By Patrick Burnson
Published: May, 2011
The Port of Oakland and the rest of the state were given some good news last month about exports in the year’s first quarter. California’s shippers began 2011 by posting their highest outbound totals ever for the month of January, according to an analysis by Beacon Economics.
In the Bay Area, exported air freight tonnage through San Francisco International was up by 11.9 percent over last January, while outbound loaded container traffic across the Bay at the Port of Oakland rose by 7.6 percent.
“California’s exporters firmly put the Great Recession behind them in January by racking up their fifteen consecutive month of strong, year-over-year growth in trade,” said Jock O’Connell, Beacon Economics’ International Trade Adviser.
O’Connell also commented on the impact from Japan’s calamity:
“As reconstruction efforts unfold, Japanese demand will almost certainly grow for a fairly wide range of California-made goods—from rice and other food products to pharmaceuticals and medical instruments to high-tech electronic machinery and industrial equipment. As a result, I would look for California’s export trade to Japan in 2011 to be at least 15 percent higher than last year’s $12.2 billion total.”
The state’s $11.75 billion merchandise export trade in January increased by 14.5 percent over the $10.26 billion in exports recorded last January. Manufactured exports were up by 11.6 percent, while non-manufactured exports (chiefly raw materials and agricultural products) were up by 18.9 percent.
On a somewhat less positive note, the Beacon Economics analysis indicates that, while California accounts for 12.4 percent of U.S. residents, it contributed just 10.7 percent of America’s export trade in January and only 9.6 percent of the nation’s manufactured exports. By contrast, California accounted for 13.1 percent of the nation’s merchandise export trade as recently as January 2005.
“It isn’t clear what is driving these trends as manufacturing in California overall seems to be doing better than the national average,” said Beacon Economics founding partner Christopher Thornberg. “Indeed, manufacturing output in California rose from 10.2 percent of the economy in 2004 to 11.9 percent in 2009,” he said. In the United States overall, output fell from 12.6 percent to 11.3 percent during the same period. California’s seaports and airports remain vital gateways for international trade.
The outlook for exports is for moderate export growth, according to the Beacon analysis.
“Although a generally weaker dollar helps by making California and other U.S. goods cheaper in foreign markets, austerity budgets in Europe coupled with anti-inflationary measures in China and other fast-growing economies may retard demand for imported products,” O’Connell explained. “Still, we’re expecting exports to continue growing through the year.”
Arguably the biggest wild card right now involves the price of fuel. “Economies tend to go wobbly and global supply chains start experiencing serious palpitations whenever oil futures float much over the $100 a barrel mark,” O’Connell warned.
One-Day Strike at Port of Oakland
The International Longshore and Warehouse Union staged a one-day strike in March at the Port of Oakland.
The action was unannounced, but appears to have been staged in solidarity with the Teamsters in a larger demonstration to promote unionized labor. Others in the industry believe that it may have simply been an action to honor of the death of Martin Luther King Jr.
In any case, major terminals were shut down, affecting key shipping lines including: China Shipping; CMA-CGM; Evergreen; Hanjin; Hapag-Lloyd; Maersk; NYK; OOCL; U.S. Line; Yang Ming; and Zim.
Port Funding Addressed by Recent Seminar
As all of our nation’s major ocean cargo gateways attempt to expand their footprints and compete with enhanced infrastructure, finding the money for many such projects continues to be a daunting challenge.
Last month’s biennial Port Administration and Legal Issues Seminar in San Francisco, sponsored by the American Association of Port Authorities, featured an in-depth discussion on port funding and public finance management. Peter Daly, maritime director for the Port of San Francisco, welcomed the delegates on opening day, noting that the port has a thriving “public-private” funding business model.
