RealShare INDUSTRIAL WEST
Sluggish Port Activity
Weighs Down Industrial
With less container
traffic coming in,
this sector is hurting
By Don Jergler
Sitting a few football fields from the Port of Long
Beach, more than a dozen industry experts recently
gave some grim short-term predictions for the industrial market and the Los Angeles area’s twin ports on which
that sector is so dependent.
The Los Angeles and Orange County industrial markets both
have registered negative net absorption in the third quarter of
this year, something that has been virtually unheard of lately in
Southern California, where the growth of the logistics industry
and other factors in recent years have generated a seemingly
endless demand for industrial buildings.
After nearly a dozen years of continuous growth, container
volume at the ports of Los Angeles and Long Beach continues
to drop. “The entire West Coast lost business,” keynote speaker
Jon DeCesare, CEO of WCL Consulting, told an audience of
more than 200 industry professionals at the fourth annual
RealShare Industrial West conference and networking event,
held last month at the Hyatt Regency Long Beach.
After 11 years of consecutive growth, often near or exceeding
double-digit percentages, container volume dropped off at the
twin ports starting in 2007, with volume falling 10.5% in Long
Beach and 4.8% in LA year-over-year in September 2008, he
noted. “The question is: Is this the new reality, or will volume
come back to LA?”
The ports were hindered first by the 2002 lockout, then a
labor and rail shortage in 2004 and, in the past few years, by
Nimby opponents, stringent clean-air programs and, in particular, by alternative ports in the US, DeCesare added.
Container traffic to East Coast ports continues to grow, he
noted, adding that several new ports on the other side of the
country have opened, or expanded capacity, and that future
planned capacity improvements to the Panama and Suez Canals
More than 200 industry professionals gathered for the fourth annual RealShare Industrial West conference at the Hyatt Regency in Long Beach. Panelists
discussed “What it Takes to Buy and Finance Deals in Today’s Dysfunctional Environment.” It was one of several panels that day.
