Weak dollar sends more goods out of U.S. through local ports.

The ports of L.A. and Long Beach have long seen explosive growth in imports. But this year, the story is exports, which have taken off.

A weak dollar, higher-than-expected demand for raw and partially-finished goods in Asia and super-sized container ships are all behind the surge.

In the first seven months of 2005, the volume of exports from the Port of Long Beach shot up 22 percent compared with the like period last year.

"Thanks to the cheaper dollar, we're seeing more of everything going out of the ports, Long Beach in particular," said Dennis MacDonald, export manager for Norman Krieger Inc., a freight forwarder.

Exports from the Port of Los Angeles were essentially flat, though total container volume is down 4 percent from last year. Shippers have turned away from the port after last year's tie-ups and the inability of the port to accommodate the newer generation of super-sized cargo ships.

Overall, the dollar value of exports from the L.A. area--including air cargo--has risen by 3.2 percent during the first six months of 2005 compared with 2004, according to U.S. Department of Commerce figures. Imports, meanwhile, have risen nearly 11 percent in dollar value.

This smaller rise in dollar volume is a sign that lower-value products are being exported, said Jack Kyser, chief economist of the Los Angeles County Economic Development Corp.

Indeed, local trade consultants have seen huge increases in shipments of basic commodities to Asia--especially China--as well as Europe. Among the items being shipped are waste paper, plastic and metal products, cement, and agricultural commodities, including hay bales.

"Most of the exports are low-value products with small margins to begin with and low-value products are even more affected by declining currencies," said T.L. Garrett, vice president of the Pacific Merchant Shipping Association.

While basic commodities have been shipped out of the ports for years, the levels are increasing sharply. "China is gobbling up everything it can get its hands on," said Bill Snyder, senior vice president and manager of the trade department at Bank of the West.

Exports of higher-value items are also increasing as the cheaper dollar makes these products more affordable overseas. Over much of the past year, the value of the dollar plunged against the Euro, before rebounding slightly.

Shipments of computer products have also risen, although MacDonald and Snyder said much of that activity is coming out of the Port of Oakland, which is close to Silicon Valley.

But the single largest component of container exports at both local ports is--and has long been--empty containers. After the products are offloaded at the ports, the containers are needed in Asia to ship even more products over.

Exports

Increase at Long Beach. *

(in thousands)

       Exports (full 20-foot        Exports
           containers)         (empty containers)

2004          573.7                  895.5
2005          698.9                1,172.1

* Year (Jan.-July)

Source: Port of Long Beach

Note: Table made from bar graph.