52 organizations sent a letter to Governor Newsom, Lt. Governor Kounalakis, and the Legislature requesting action to reverse the decline in West Coast ports’ market share before CA permanently loses jobs and direly needed state revenue.
The letter follows:
July 13, 2020
Dear Governor Newsom, Lt. Governor Kounalakis, Members of the State Legislature
The undersigned trade associations, organizations, and businesses altogether represent a broad cross-section of the California economy, including such industries as retail, manufacturing, agriculture, aerospace, and logistics. The importance of a robust goods movement sector throughout the state cannot be understated. The sector District 190 supports 1 in 3 jobs in California and 1.6 million trade-related jobs in Southern California, generates direly needed tax revenue, and services the state’s critical industries. In the Port of Oakland alone, agricultural items totaled $13.75 billion which accounted for nearly 70% of the port’s total exports last year. Moreover, the sector ensures that critical supplies can be available during the current crisis. We are requesting that Governor Newsom and the Legislature consider the importance of California’s goods movement industry sector and take action to reverse the decline in market share before California permanently loses jobs and direly needed state revenue.
West Coast Ports Face “Significant” Continual Decline in Market Share.
- A recent 3TUanalysisU3T, prepared for the Pacific Merchant Shipping Association (PMSA) by international trade economist Jock O’Connell found that West Coast ports’ market share has declined 19.4 percent since 2006.
- The impacts of these factors resulted in approximately 5.6 million fewer containers traveling through West Coast Ports versus competing gateways had West Coast ports maintained their market share.
Loss of Market Share Impacts the State’s Largest Employers, Increases Costs for Consumers, and Deprives the State of Infrastructure Investment, Environmental Benefits, and Tax Revenues.
- The loss of market share impacts labor unions, many of California’s leading employers, including retail, trucking, warehouse and distribution centers, ports, railroads, marine terminals, and export industries such as agriculture and aerospace.
- Infrastructure improvements and operational costs will be borne by California residents, as discretionary import cargo is diverted to East and Gulf Coast Ports.
- Trade routes are established over time and around infrastructure such as rail, warehouses, and distribution centers. Loss of market share means that investments in infrastructure are happening in other states, not California, resulting in more jobs and higher state and local tax revenues elsewhere and fewer jobs and state and local tax revenue here.
We propose that you take the following steps to address the major causes of the loss of market share:
- Promote California ports as the most efficient and environmentally progressive ports in the nation.
- Meet the challenge from East and Gulf Coast states whose governmental leaders promote and invest in their ports and goods movement industries.
- Re-examine the state and regional regulations that are creating a disincentive to use California gateways. Determine whether the policies, particularly in environmental areas, are backfiring and encouraging more greenhouse gas emissions by sending more business to ports that are far behind California’s climate program.
- Reconcile state laws encouraging environmental and efficiency mandates with the need to re-train workers to adapt to a changing work environment.
Thank you for your consideration of this request. We look forward to working with you to ensure the competitiveness of our ports and to recapture lost market share. If you have any questions or need additional background on the issues raised, please contact John McLaurin at jmclaurin@pmsaship.com.
Sincerely,
Signatories: Pacific Merchant Shipping Association | California Trucking Association | NAIOP California | San Pedro Chamber of Commerce | Harbor Trucking Association | San Gabriel Valley Economic Partnership | California Business Properties Association | Harbor Association of Industry & Commerce | Inland Empire Economic Partnership | Industry Business Council | Customs Brokers Association of Northern California | California Railroad Association | LA Custom Brokers & Freight Forwarders | Western Growers | Los Angeles County Business Federation | International Association of Machinists and Aerospace Workers District 190 | El Monte/ South El Monte Chamber of Commerce | Wilmington Chamber of Commerce | Los Angeles Area Chamber of Commerce | California Citrus Mutual | Propeller Club, Port of Los Angeles and Long Beach | South Bay Association of Chambers of Commerce | Foreign Trade Association | Future Ports | Pacific Maritime Association | California Manufacturers & Technology Association | California Retailers Association | Nisei Farmers League | African-American Farmers of California | National Retail Federation | California Hispanic Chamber of Commerce | Retail Industry Leaders Association | California Walnut Board & Commission | Long Beach Chamber of Commerce | Valley Industry & Commerce Association | California Chamber of Commerce | Agriculture Transportation Coalition | Pacific Coast Customs Brokers and Freight Forwarders | California Cotton Ginners and Growers Association | Western Agricultural Processors Association | American Pistachio Growers | Tulare Farm Bureau | National Shippers Strategic Transportation Council | Kings County Farm Bureau | Merced County Farm Bureau | Madera County Farm Bureau | Fresno County Farm Bureau | San Joaquin Farm Bureau | California Farm Bureau | California Fresh Fruit Association | Milk Producers Council | Stanislaus County Farm Bureau
CC: Ann O’Leary: Chief of Staff, Office of the Governor | Tom Steyer: Chief Advisor to the Governor on Business & Jobs Recovery
