State Freight: California

By Alex Riemersma, Ally Logistics Pricing Analyst

 

THE MOST POPULATED STATE IN THE UNITED STATES AND THE LARGEST SUB-NATIONAL ECONOMY IN THE WORLD

California, the birthplace of the internet, is the most populated state in the United States. It is home to the grizzly bear, Yosemite National Park, the Golden Gate Bridge, nineteen professional sports teams, and the world’s largest tree. With a gross state product of $3.4 trillion in 2021, its economy ranks as the largest sub-national economy in the world. If California were its own country, it would possess the fifth largest economy in the world.

CALIFORNIA CITIES AND PORTS

Its industrial hubs, Los Angeles and San Francisco, are the nation’s second- and third-largest urban economies. California is also home to the two largest ports in the country. Located 18 miles apart, the Port of Los Angeles and the Port of Long Beach span 7,500 and 3,200 acres, respectively. Together, they account for an annual amount of $256 million metric revenue tons of cargo tonnage.
California’s importance to the logistic makeup of the United States cannot be understated. Its massive population, coastal location, and diverse climate make it a multiple, varied hub for all things shipping and receiving.

CALIFORNIA EXPORTS

The U.S. Department of Commerce reported that California exports amounted to $175.12 billion, 10% of the total U.S. exports in 2021. Accounting for nearly 25% of the state’s exports, the California Department of Commerce reports that computers and electronic products are the state’s leading export.
Other top categories of exports from California include non-electrical machinery (11.6%) and chemicals (10%) which are mostly exported to Asian countries. The largest importers of Californian goods are Mexico ($27.23 billion), Canada ($17.89 billion), China ($16.7 billion), and the European Union ($27.42 billion spread across Europe).
California is a global exporter as evidenced by the relatively even distribution of exports to its network of importers.

CALIFORNIA IMPORTS

California’s coastal location and relative proximity to China make it the prime destination for imports from China. Six of the ten largest ports in the world reside along China’s coastline. The United States is the largest importer of Chinese goods ($583.3 billion in 2018) in the world. The variables in this equation amount to a massive trade deficit as Chinese goods move through California’s largest ports.

California is most certainly a net importer. Operating with a trade balance of -$239.9 billion, California can be seen as America’s gateway to Asian production.

CALIFORNIA TRANSPORTATION JOB MARKET

International trade in California supports more than 5 million California jobs. Included in that figure are roughly 137,000 truck drivers. Eight out of every 1,000 jobs in California belong to a trucker.

The largest outbound truckload markets in California are centered around the state’s largest ports in Los Angeles and San Francisco. Because Los Angeles boasts the two largest ports in the country, the Los Angeles market sees the highest amount of truckload traffic in the country.

It is an extremely desirable inbound location for truckers nationwide because there is always freight to be moved and shippers who are willing to pay a premium to secure their share of capacity.

CALIFORNIA AGRICULTURE

While its major cities are home to some of the largest corporations in the world, California’s Central Valley offers a vastly different form of production. Robust agricultural output made possible by its diverse climate helps supply the United States with over a third of its vegetables and two-thirds of its fruits and nuts. The “Central Valley” is one of the most productive agricultural regions on the planet. California’s agricultural abundance includes more than 400 commodities per the California Department of Food and Agriculture. Their most valued commodities: dairy products ($7.47 billion), almonds ($5.62 billion), and grapes ($4.48 billion) are distributed throughout the United States and exported abroad.

CALIFORNIA TRUCKLOAD MARKET

California’s immense population, coastal location, and varied climate provide incentives for companies large and small to call California home. High port volumes paired with wide-ranging industrial and agricultural production make the state a desirable location for truckers to flock to. Their capacity is at a premium when they enter Los Angeles, San Diego, San Francisco, or many of the other large port cities.

Freight brokers and their customers alike must understand that loads shipping outbound from California will be consistently more expensive to move than loads coming into state borders. Load-to truck ratios in California are always very high, and when there are many more loads than trucks, capacity becomes more expensive to secure.

As foreign production and international trade grow in scope, the trucking industry will expand in tandem as the supply of trucks continues to rise to meet demand for capacity. California’s largest markets are permanently entrenched as some of the most desirable inbound locations for trucking companies nationwide.

CALIFORNIA QUICK FACTS

Population 39.35 million people, largest state in the US.

Largest Cities

• Los Angeles – 3,973,278
• San Diego – 1,414,545
• San Jose – 1,029,409
• San Francisco – 874,784

Nicknames

• The Golden State
• The Land of Milk and Honey
• The El Dorado State
• The Grape State

Consumer electronics

• Apple
• Facebook

Oil & Gas

• Chevron
• Exxon Mobil

Financial Services

• Wells Fargo
• Visa
• Paypal

Computer Hardware

• Intel
• HP

Media Entertainment

• Walt Disney
• Netflix

Insurance

• Farmers Insurance Exchange

Automotive Manufacturing

• Tesla

Retail

• Walmart
• CVS
• Gap
• Ross Stores
• Williams-Sonoma