When the recession struck the US, among the places its impactwas felt most dramatically were the ports of Southern California,where container traffic, an all-important measure of economicactivity, plunged by more than 1.4 million units between 2007 and2008, then plummeted another 2.5 million units between 2008 and2009. So it should come as no surprise that industry experts inSouthern California—where two of the largest ports in the nationare located—are keeping a close eye on traffic. They expect thatwhen the recovery arrives, some of the first places it will make animpact will be at the ports, as well as in the logistics industrythat so closely reflects port activity.

An uptick in traffic, logistics-watchers say, could be one ofthe first signs of a recovery since more logistics business meansmore demand for distribution space. And demand for distributionspace is likely to increase long before occupancy rises for office,which is expected to lag rather than lead the recovery.

Lance Ryan, vice president of marketing and leasing at theCarson, CA office of Watson Land Co., points out that the ports ofLos Angeles and Long Beach are a bellwether for gauging the USeconomy, especially since two-thirds of the containers comingthrough them are imports headed for retail stores. “Forty percentof all products imported to the United States enter through theSouthern California ports,” Ryan explains. “Retail ultimatelydrives all of the import traffic,” he adds, pointing out thatretailers choose the ports for importing their goods based largely,and logically, on where those goods are manufactured.