were losing manufacturing jobs as a result of economic restructuring, some could gain them back on the other end of the commodity chain by building extensive distribution networks that connected imported products with the insatiable appetite of the American heartland.
Of course capital did not completely abandon cities in the United States after the late 1970s. Cities like Los Angeles capitalized on macroeconomic shifts by transforming themselves into transpacific trade gateways. Such a transition was possible because although U.S. production of commodity goods declined after the 1980s, American consumption did not. On the contrary, U.S. consumer demand—combined with the shorter product cycles and readily available credit discussed above—drove imported commodity shipments to record heights at the same time that U.S. production declined. Values of imported commodities jumped from $790 billion in 1996 to $2.1 trillion in 2008.
Los Angeles and Long Beach adopted the global logistics development strategy and pushed ahead of other ports by implementing regional policies that expanded their capacity to absorb a larger portion of Asian imports. Local policy makers, led by the port authorities of Long Beach and Los Angeles, leveraged tremendous amounts of public resources to invest in infrastructure that allowed them to expand their throughput capacity. Billions of dollars were spent on infrastructure to modernize the ports for the global distribution market.36 For example, net investment in both ports topped $493,732,400 in 2006.37 Port authorities budgeted more than $2.5 billion in capital investments for the 2010 fiscal year. This did not include private and public spending on rail and transportation infrastructure both near and away from the ports.
Local officials had reason to be happy with the results. Global economic restructuring and local infrastructure spending enabled the region’s share of imported goods to reach record levels. Export and import container volume grew from 9.5 million twenty-foot equivalent units (TEUs) in 1999 to 13.1 million by 2004,38 an increase of 38.2 percent.39 Imported container volume reached its peak at 8.1 million TEUs in 2006 and 2007 (see figure 7). While many pointed to 2008 as a year of major port decline, container volume remained relatively high. Port activity grew at such record rates during the 2000s that even a decline of 9 percent between 2007 and 2008 did not wipe out historically high volumes. By 2010 imports were on their way back up and reached 7.1 million TEUs.
FIGURE 7. Port growth by container volume. Author’s analysis of data from Port of Los Angeles and Port of Long Beach.
JUST-IN-TIME URBANIZATION
The proliferation of consumer goods was induced by one of the most dramatic changes in modern production and distribution that occurred during the 1980s, when Japanese automobile manufacturers introduced JIT production systems. Toyota was a leader of JIT managerial techniques and provides an example of how JIT increased production efficiencies by focusing on market demand. The JIT approach allowed small work teams to produce cars and parts as they were needed in the marketplace. This market-driven process was supposed to reduce costs associated with holding excessive inventories in both supplies and finished goods.40 For example, parts were only produced after production teams received an order from Toyota’s assembly crews. Toyota’s JIT system was successful because it used emerging information technologies to build closer links between consumer demand and dispersed production networks. Of course this type of pull system—in which products are made in response to market demand—had existed long before JIT was invented as a concept.41 Yet what made Toyota’s JIT system so powerful was that it led to widespread adoption of market-driven manufacturing.
Companies adopted JIT’s market-driven principles by integrating consumer desire into commodity design and procurement. Old top-down models, in which firms designed new products and pushed them out to market, gave way to more data-savvy manufacturing techniques, in which consumer demand shaped production and distribution.42 Dell Computers is a quintessential example of how this worked. The company mixed JIT part sourcing with direct market demand and revolutionized business-to-consumer relations. Under Dell’s system, consumers logged on to the company’s website, configured their desired computers, and placed their orders.43 That simple act of clicking a button put an entire social and economic system in motion. The company famously claimed that it used JIT part sourcing to reduce stock from thirty-five days in 1995 to six days by 1999.44 Other companies used JIT to incorporate market information into product design. An example is the Sony Walkman. Sony engineers developed a design process that incorporated consumer behavior and desire into possible iterations of the audio device. The intention was to make products that were more responsive to market dynamics by producing exactly what consumers wanted.45 Sony’s demand-driven approach was reflective of a “cultural circuit” in which the “products both reflect and transform consumers’ behavior.”46 Cultural circuits enable consumer demand to influence what is made, how it is designed, and when it is delivered.
Market-driven production provided new opportunities for retailers to increase their leverage as intermediaries between consumers and manufacturers. Companies such as Walmart and Target developed new business strategies that gave them greater power in the JIT corporate world because they built their business models around real-time market information. Walmart revolutionized retail by creating a vast information system that made it the world’s largest purchaser of commodities.47 Access to market data gave retailers tremendous purchasing power, which they used to influence what was made and by whom. The most successful retailers used their new influence to transform shopping behavior by merging more efficient supply chains with cutting-edge sales strategies.48 They increased sales by monitoring and cultivating market demand, a practice that also transformed modern logistics. One way they increased sales was by blending style and status with low-cost goods to make discretionary shopping available to a larger audience.
How new retail strategies affected logistics workers is described later in the book. Here I want to conclude by examining how companies used cultural circuits and retail strategies to increase the flow of consumer goods. For example, retail companies increased sales by shortening the time that products spent between design and delivery dates, thus increasing overall inventory turnover. Retailers also increased turnover rates by developing business models that focused on goods with shorter product cycles. All of this was made possible by JIT supply chain techniques and by logistics innovations that enabled smaller time-to-market distribution windows. As a consequence, consumers were lured into buying the latest thing by companies that constantly updated their product lines. Old ideas of seasonal buying were discarded because the constant flow of new merchandise made shopping a year-round experience. These new tactics propelled the circulation of capital by flooding the market with a constant stream of desirable products.
Low-cost goods took on new cultural meaning by enabling customers to reposition themselves within a community of style that retailers transformed by changing the shopping experience. Retailers have routinely used space and style to change the practices and meanings of shopping. Major department stores, for example, were created as spaces in which shoppers could experience the wonders of modern commodities inside a fabricated and controlled environment. The mall, according to Michelle Lowe and Neil Wrigley, was designed as an “essential site for communication and interaction, a place for ‘hanging out’, for ‘tribalism’, where adolescent subcultures are formed and where key lifetime experiences take place.”49 Shopping places set the spatial context for transactions that linked cultural and economic spheres.50 They gave shape and meaning to otherwise mundane economic transactions by imbuing the act of shopping with particular lifestyle experiences. Culture and aesthetics have been key retail strategies precisely because they can establish lifestyle practices that effectively link individual identity to particular commodity types and social status. For example, certain products are marked as aspirational purchases: the value of buying the thing extends beyond function and need. Such commodities function as cultural symbols that convey status.51
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