Los Angeles Port is beginning to feel the pinch
September 16, 2022
As the nation's busiest container port finally begins to see a reprieve in cargo volume growth, the import rise at the Port of Los Angeles slowed in August as expected.
Executive Director Gene Seroka reported on Thursday that August 2022 cargo volumes came in an estimated 806,000 TEUs, approximately 15% less than the same period a year ago and 9% below the five-year average for the month of August.
The early arrival of holiday goods and concerns about the economy reduced the record pace that was maintained through the first seven months of the year after record-breaking trade volumes in 2021.
The Port of Los Angeles has transported an expected 7.2 million TEUs through eight months of 2022, which is a 1.6% decrease from the record rate set last year.
“Some goods that usually arrive in August for the fall and winter season were shipped earlier to make sure they reached their destination in time,” Gene Seroka said “Additionally, inflationary concerns and elevated inventory levels have made some retailers and e-commerce sellers more cautious.”
As compared to last year August 2022’s loaded imports reached an estimated 404,000 TEUs, down 17% and the lowest monthly volume since December 2021. The figure is also 12% below the five-year average for August.
In his monthly cargo update, Seroka also cited "cargo being diverted to East and Gulf Coast ports in order to avoid port congestion and as a possible hedge to West Coast labor contract negotiations, now in overtime." Early this week, for example, the Port of Savannah reported its busiest month ever in August, with overall monthly cargo volumes coming in more than 18% above August 2022.
Gene Seroka also spoke of a more localized cargo shift, from Los Angeles to Long Beach, although he said this is expected to be temporary. The Port of Long Beach reported Thursday handling 806,940 TEUs in August, nearly 1,000 TEUs more than Los Angeles, which is usually busier by pretty much all accounts.
In August, inactive loaded export of port reached an estimated 100,000 TEUs with a 1% drop compared to August 2021. Whereas, empty containers being returned to Asia landed at an estimated 301,000 TEUs, an 18% decline compared to last year. “We’re now approaching four years of lagging U.S. exports,” Gene Seroka said.
The Alternative for containership
There is some good news to announce on the containership back up front as the current number of ships in the row has now been decreased to 11 ships, a significant drop compared to the 109 ships waiting at the peak in early January.
The port has been able to nearly eliminate the backlog of ships waiting to enter the port by 90% compared to earlier this year, port got capacity on terminals and can handle cargo coming in more efficiently than last holiday season.
Looking ahead, cargo volumes in Los Angeles are expected to be lighter in September and for the rest of the year, at least compared to 2021’s record.
To keep things in perspective, even with this projected softer volume in the back half of the year, the Port of Los Angeles is headed to the second busiest year in our history,” -Executive Director Gene Seroka.