Short and Sweet?
Vol. II, Art. 20

This is supposed to be the IT age, the age of “Information Technology”. The problem is that the information being spewed out for public consumption is either inaccurate, incomplete or insincere. In a lengthy analysis of the economic conditions on the West Coast, the Regional Economic Briefing published by the Federal Reserve Bank of San Francisco included 31 graphs, a generous amount of charts and some authoritative comments on past and future developments. In all, the presentation required 12 full pages and had the appearance of a white paper rather than a “briefing”. But .... only 7 lines were devoted to the West Coast’s most important economic issue, the congestion that’s strangling port operations and the transportation infrastructure. The report, however, states that the situation has been “resolved”. Here’s what appears at the bottom of page 4 of the briefing:

“Transportation

• The backlog of inbound ships in Southern California generally has been resolved.

• Contacts at the Los Angeles port indicated that the bottlenecks were in part resolved by hiring new workers to handle the high volume of traffic.

• Shipping lines had responded to the bottlenecks by increasing their prices for ground and sea transport.

• According to our contacts, transport lines have not lowered their prices as the backlogs have been resolved.”

So there you have it. Short and sweet. The backlogs have been resolved, according to “contacts”. Those contacts, of course, weren’t identified in the report, but just a few days ago at the Long Beach AAPA seminar, Mr. Philip Connors, Maersk’s Executive VP, saw things differently. After citing the port’s adverse capacity, he stated that the infrastructure limitations in the rail and trucking industries are even worse. “The real problem is infrastructure ... It is, in my opinion, a national crisis”. How did the “contact” miss out on this assessment? Mr. Connors was one of the featured speakers at the AAPA seminar.

In nearby Oakland’s Marine Terminals is an acknowledged authority on West Coast congestion, Douglas Tilden, and he’s the one the Fed’s should have consulted. This is what he said:

“2004 demonstrated once again the fragility of the international transportation system. The combinations of unexpectedly strong volumes out of China and issues with “right-sizing” the Southern California work force brought previously unimaginable delays to the movement of transPacific cargo ... Other ports around the world struggled with congestion, but none suffered the level of disruptions of Southern California ...We will definitely be faced with much broader issues in 2005". [Makes you wonder on what other matters the Fed may have been led astray.]