America’s Leading International Trade Centers and their Entrepreneurial Agencies: Challenges and Strategies in the New York and Los Angeles Regions

This is a comparative and historical analysis of the trade-development challenges that face the New York and Los Angeles areas, where more than one-third of all international U.S. airborne and waterborne trade (measured by value) enters and leaves this country. These two regions historically developed different governance systems for their airports, seaports and freight-rail systems, dating back to the early 1900s. New York has a centralized system for its air and sea terminals, featuring the bi-state Port Authority of New York and New Jersey. Los Angeles has a highly decentralized system with semi-autonomous city departments in Los Angeles and Long Beach governing the seaports and international airports. The Los Angeles region’s freight-rail is governed by public/private joint-powers agreements, while New York’s is largely private. What impact have these different governance systems had on trade, infrastructure, and regional development? How have the regions grappled with challenges such as the hard times of the 1930s, the early 1990s, and the current economic downturn? Can these metropolitan areas manage the expected trade growth while dealing with increasingly strict environmental regulations, the greater costs imposed by post-9/11 security concerns, and newly empowered local communities? The entrepreneurial agencies discussed in this paper will occupy a major role in meeting these challenges, which will require greater levels of cooperation among these and other public and private entities. Does the multi-functional approach of the Port Authority place it in a stronger position to manage the challenges of the early 21st century? If so, how can such a large, complex agency balance burdens and benefits, and maintain accountability to its different constituencies? Does Los Angeles need more bureaucracy and less democracy? With wholesale governance changes more or less off the table, how can public officials in that region overcome their endemic fractionalization to serve the greater good? In their varying structures and range of responsibilities, these major entrepreneurial agencies illustrate distinctive ways in which large regions can design and operate transportation networks, as cities and states grapple with economic-development needs in a global environment. Their successes (and failures), and the opportunities and obstacles they face, should offer useful lessons to other cities and regions around the world. This paper is divided into three sections. The first part examines the early 20th century creation of these public agencies and their major projects and development through 1990. The second section explores the mounting challenges to these agencies and their trade facilities, 1990-2009. The final section considers strategies needed to grapple with long-term challenges, including competitive threats from rival trading regions, the need to handle expanding air and sea traffic, security issues, and environmental concerns. We address these questions using original source materials, interviews with part and current officials and stakeholders, and statistical analyses of regional trade, traffic and economic data.