Ten Day US Business Impacts Soar as Fear Shifts to Labor Productivity and Trade Corridor Capacity

The 10-day Los Angeles and Long Beach ports shutdown cost the United States $5 Billion dollars, said Senior Vice President Wally Baker, Los Angeles Economic Development Corporation (LAEDC). That doesn't count lost wages, taxes and the other disruption costs.Baker says according to new figures that are based on the Orange North-American Trade Rail Access Corridor (OnTrac) Trade Impact Study $2.3 billion or nearly half of the total10-day labor dispute costs were recorded in California. This is probably the worst time to have a labor dispute in the harbor with the holidays just around the corner, said Baker. The Christmas volume going through the ports this time of the year means we will soon have congestion on many of our nation's already overtaxed rail corridors systems, too. Further labor slowdowns will only make matters worse.According to another study the LAEDC completed earlier this year the LA basin rail capacity out of Los Angeles to the East Coast will soon reach maximum capacity in the next three to five years. There is just not that much extra capacity out there, says Baker.The OnTrac study, commissioned last year by the OnTrac Joint Powers Authority, mapped products throughout the country by Congressional District. The data (www.MayoCommunications.com) shows every Congressional member benefits from and is also impacted by the products that go through the corridors and ports in the Los Angeles basin. We have a strong economy in Southern California with a huge consumer base and this shutdown shows that we saw 37% of the national impact in LA County just from the ports of LA and Long Beach, said Ken Ackbarali, vice president and managing director of Economic Consulting, at LAEDC. The OnTrac Trade Impact Study was designed to help members of Congress better understand why corridors and ports are important and cannot be separated from their economic benefits. Ackbarali added, Certainly, the focus of the West Coast labor dispute will shift to our rail corridors now and show some of the capacity problems that must be addressed.The study also reveals that even the US Treasury is quite dependent on the revenue generated by the local rail corridors and ports. About $7 billion annually or 45% percent of all US customs revenues are assessed on products that go through the LA Basin ports and corridors each day. Additionally, Los Angeles County recorded a business interruption cost of $2.0 billion for the 10-day work stoppage. In the Southern California economy, the study also shows that about $88 billion of trade flows through the region annually just from the two ports.The study also reveals that LA local ports and trade corridors deliver more than $196 billion annually or $537 million per day of products and commodities in every part of the country. The study looked only at cargo that went through LA area corridors and ports in 2000. Here are the 50 States that show annual benefits and the cost of the 10-day labor stoppage:All dollars are expressed in millions of year 2000 dollars.(Millions of $)In & Out to/from10-day ImpactStateLA/LB Ports LA/LB Port closureUS$196,374.6$5,380.1California$92,815.5$2,542.9New York$15,962.2$437.3Texas$11,827.5$324.0Illinois$11,748.5$321.9New Jersey$10,747.6$294.5Tennessee$4,667.8$127.9Michigan$3,602.7$98.7Georgia$3,544.7$97.1Ohio$3,475.0$95.2Arizona$3,259.9$89.3Missouri$3,128.0$85.7Minnesota$3,092.4$84.7Massachusetts$2,817.5$77.2Indiana$2,597.5$71.2Florida$2,053.1$56.2Pennsylvania$2,022.0$55.4Kentucky$1,784.8$48.9Washington$1,743.1$47.8North Carolina$1,599.9$43.8Wisconsin$1,480.7$40.6South Carolina$1,387.5$38.0Colorado$1,231.6$33.7Kansas$984.8$27.0Alabama$865.0$23.7Virginia$847.2$23.2Connecticut$806.8$22.1Arkansas$707.7$19.4Nebraska$695.9$19.1Louisiana$680.9$18.7Maryland$486.6$13.3Utah$483.3$13.2Mississippi$452.1$12.4Oregon$422.1$11.6South Dakota$373.6$10.2Iowa $366.4$10.0(Millions of $)In & Out to/from10-day Impact State LA/LB Ports lA/LB Port closureWest Virginia$337.8$9.3Oklahoma$299.1$8.2Rhode Island$276.3$7.6Nevada$136.3$3.7Delaware$132.8$3.6District of Columbia$115.6$3.2New Hampshire$98.8$2.7Maine$86.3$2.4New Mexico$31.6$0.9Hawaii$30.5$0.8Idaho$24.5$0.7Vermont$15.5$0.4Alaska$9.5$0.3Montana$7.9$0.2Wyoming$5.4$0.1North Dakota$5.0$0.1Note: Figures include data for ports of Los Angeles and Long Beach onlySources: OnTrac Trade Impact Study; October 2002 BST Associates (Bothell, Washington)Los Angeles County Economic Development Corp.International Trade, via Los Angeles and Long Beach Ports, and East Coast Trade Corridors for selected Southern California Regions (Year 2000 dollars.))RegionCong. Dist.Total($ Billions)10-day impact ($ Millions) Total LA/LB Ports($ BillionsLos Angeles County$51.1$73.0$2,000Orange County$270$6.9$9.9Riverside/San Bernardino$1.7$2.4$70San Diego/Imperial County$1.2$1.7$50Santa Barbara/Ventura/ San Luis Obispo$0.6$0.8$20Southern California Total$61.5 $87.8 $2,410Northern & Central CA. $3.1$5.0$133California Total Impact$64.6$92.8$2,543Note:Figures include data for Ports of Los Angeles and Long Beach only.Sources:OnTrac Trade Impact Study; October 2002BST Associates (Bothell, Washington)Los Angeles County Economic Development Corp.The LAEDC's results being released this week (Oct. 10, 2002) are from a yearlong study for the OnTrac Joint Powers Authority. LAEDC collaborated with BST Associates on this study due to the firm's vast knowledge of port and corridor issues. The LAEDC and OnTrac JPA have also worked closely and received a great deal of assistance from the Port of Long Beach, said Ackbarali.For more details and background on OnTrac visit http://www.ontrac-jpa.org/ and for a breakdown of the study visit www.MayoCommunications.com. For interviews call Aida Mayo, MAYO Communications, 818.340.5300 or 818.618.9226or Wally Baker, LAEDC at 213.236.4812, Ken Ackbarali, LAEDC, 213.236.4816, or Jack Kyser, LAEDC, 213.236.4820 or George Young, George Young & Associates at 310.822.0370. For more details on the products flowing in and out the L.A. and Long Beach Portscontact MAYO Communications at 818.340.5300 or extremepr@MayoCommunications.com. ##