Southern California’s logistics networks at the crossroads as pandemic ebbs

San Francisco – Good news and bad news surfaced in Southern California this week as the City of Los Angeles benefitted by the largesse of the CMA CGM Group, which donated 200,000 face masks to help support the fight against the COVID-19 pandemic.

The huge ocean carrier is especially committed to the Port of Los Angeles – the country’s top gateway hub – where it maintains 10 weekly services and where it is the number-one carrier, connecting the U.S. to the rest of the world. 

Some of the masks will therefore be distributed to the workers of the port in recognition of their dedication and efforts to keep the supply chains running during these difficult times.

At the same time, however, a new report prepared by analysts at the Southern California Association of Governments (SCAG), maintains that Southern California faces “severe and long-lasting” economic impacts from the COVID-19 pandemic, with Great Depression-level unemployment, supply chain interruptions and significant drops in taxable sales.

“There is no segment of our economy that is not impacted one way or another by COVID-19, which only emphasizes the need for an inclusive economic development strategy moving forward. The work we do in the coming months will be critical to how quickly and effectively we put this crisis behind us,” said Rex Richardson, a Long Beach City Councilmember and SCAG’s 1st Vice President.

One sector that could play a significant role in an economic rebound is housing, the analysis shows. While sales have slowed, supplies remain well below demand and most indications are that buyers and sellers are stalling transactions rather than deciding not to buy or sell. 

Even so, the pace of any recovery is largely going to be determined on when and how businesses are allowed to reopen and the speed in getting a vaccine to market. The SCAG analysis assumes a severe three-month decline, with the low point occurring on June 1, followed by a longer recovery period. 

The economic impacts are likely to be felt through the end of 2021, the report says.

“This is unlike anything we’ve seen in our lifetimes,” said Kome Ajise, SCAG’s Executive Director. “We know we’ve got huge challenges ahead of us, and will be working closely with our stakeholders and member cities and counties to identify a pathway to recovery that benefits all Southern Californians.”