The Growing Exports of Air

When cargo ships arrive to the Port of Los Angeles they are typically full, but what do the containers ship when they leave? When an Economist named Michael Keanan on a Port of Los Angeles boat tour was asked this question, there was no hesitation with his answer of “air”. Most often when cargo ships leave the Port of LA, there are many empty boxes, because China imports more than the U.S. exports back. With the recent setback of China’s economy, the rise of empty containers is at an all-time high for U.S. exports and has become a concern.

Michael Keanan elaborated on how cargo is brought in from Asia to provide for an entire nation, while the U.S. exports typically come from the mid-west and are in lower quantities. The economist continued explaining why cargo ships arrive full but half of them leave empty.  “When containers leave, half the containers are empty,” Michael said, “the other half are filled with low value items such as scrap metal, waist paper and agricultural products like soy beans, hay, and grains”. The items received from Asia are higher in number and more profitable then the goods leaving the U.S, which is one of the reasons why only half of cargo boxes are full.

Container_Ship

A recent article by the Wall Street Journal called At U.S. Ports, Exports Are Coming Up Empty made a statement about how one of the fastest growing U.S. exports is air. The article continued to discuss the current weak demand of troubled global markets and the tough sales American exports face abroad.

China’s cooled economy has effected outgoing exports and U.S. exporters find it tougher to make foreign sales. The Wall Street Journal article claims that the stronger dollar that makes American goods more expensive has a part in the slowing. When shipments leave the Port’s to return to Asia, they carry the waist and agricultural products that were mentioned earlier. However, these items have declined in loads.

The Port of Long Beach is one of the busiest ports in the country and September was the strait 8th month that empty containers leaving the port outnumbered those loaded with exports. Long Beach and the Port of Oakland both reported its exports of empty containers doubled and this year empties are up 20% from last year. The Port of Los Angeles empty outbound containers is up 21% compared to this time last year as well. These ports are suffering the most because they are heavily tied to trade with China.

An economist, named Paul Bingham, told The Wall Street Journal the decrease in exports that reflects economic weakness goes beyond China, it shows slowing demand in Europe as well. He also mentioned the Commerce Department stated that U.S. exports fell 2% in the month to their lowest level since October 2012.

While empties outnumbering loaded containers is beginning to be a concern, it will become a bigger issue if numbers don’t decrease within time and the U.S. continues to struggle with sales on its exports.

Leave a Reply