enroute
the long goodbye? the long goodbye?
The ports of Los Angeles
and Long Beach are
already feeling the
squeeze from higher
costs and weaker
volumes. Now, they face
a new challenge from an
expanded Panama Canal.
THE PAST SEVEN YEARS HAVE BEEN INTERESTING TIMES AT THE PORTS
of Los Angeles and Long Beach.
In October 2002, a management lockout of waterfront labor led to a 10-day
shutdown during the peak shipping season. In 2004, an avalanche of Asian
imports clogged the ports almost beyond recognition, creating supply chain
nightmares for shippers, carriers, and retailers. For the past two years, the ports
have been the battleground in a fight between local officials and the trucking
industry over the constitutionality of the ports’ clean air plan, a sweeping initiative that truckers see as unlawful interference in interstate commerce by a
local government. And the ports have borne the brunt of the worldwide economic downturn and the sharp fall-off in Asian imports into the United States.
Despite high costs, regulatory burdens, and the congestion issues that have
plagued the two ports, about 60 percent of all U.S. seagoing containerized traffic still moves through their gates. To many, the twin ports remain the barometer by which the health of domestic and global commerce is measured.
Now, the ports face a new challenge to their competitive position, one that
could not only lead to a significant and permanent diversion of cargoes but
could also have implications for the warehousing and distribution center
infrastructures in the Los Angeles basin and across the nation.
The Panama Canal is in the midst of its biggest expansion since its completion in 1914. The megaproject will create a new lane of traffic along the canal
