Source: Journal of Commerce
September 11th 2015
The Port of Los Angeles recorded its strongest August container volume since the peak year of 2006, as traffic rose 3.8 percent compared to the same period in 2015.
When combined with the record August performance announced Thursday by neighboring Long Beach, this is a good indication that Southern California traffic is returning to normal patterns, and that importers who diverted shipments from the West Coast this past year due to labor problems are returning.
The surge in inbound volume could be a harbinger of a stronger peak-shipping season than originally anticipated. Still, the “stubbornly high” inventory-to-sales ratio this summer might be a sign that the peak season will be more of a hill than a spike.
August is usually a strong month in Southern California as early shipments for the holiday shopping season combine with the remaining back-to-school shipments to produce a spike in cargo. Both ports are looking ahead to October, which usually brings another peak as the higher-value Christmas merchandise is shipped from Asia in time for the first day of the shopping season the day after Thanksgiving.
Traffic through the largest U.S. container port last month hit 786,667 20-foot container units. The total includes loaded imports, exports and empty containers being returned primarily to Asia.
Containerized imports totaled 407,804 TEUs, an increase of 6.32 percent over August 2014. It was the second highest import total of 2015. Los Angeles in March handled 430,898 TEUs, but that was an unusual month because it followed the Feb. 20 tentative contract agreement between the International Longshore and Warehouse Union and the Pacific Maritime Association. Total container traffic at Long Beach in August increased 23 percent, and imports were up 19 percent over August 2014, making it a strong month for the Southern California port complex.
The ILWU beginning last November engaged in a series of work slowdowns and shorting employers of skilled labor to gain leverage during the troubled contract negotiations. These actions led to severe congestion at West Coast ports. Employers responded in January by reducing lucrative night and weekend work opportunities for longshoremen, which only served to exacerbate the congestion problem.
As many as 28 vessels backed up in Los Angeles-Long Beach harbor during the standoff. When the tentative agreement was reached on Feb. 20, the ILWU hard-timing ended, and longshoremen were once again hired for night and weekend work. With so much cargo backed up on vessels and the docks, March this year was unusually strong.
Nevertheless, the big performance in August is a clear indication that cargo diversions are diminishing and shipping patterns are returning to normal seasonal trends. West Coast ports in the first six months of 2015 saw their share of U.S. containerized imports fall to 50.4 percent from 55 percent while the combined market share of East and Gulf Coast ports increased to 49.6 percent.
Exports in August remained weak as soft economies in Asia and the strong dollar continue to be a drag on U.S. exports. August exports in Los Angeles were down 14.45 percent year-over-year.
Overall container volumes in Los Angeles in the first eight months of 2015 are down 2.5 percent compared to the same period last year. The port is climbing out of the deep hole all West Coast ports found themselves in earlier this year due to the labor dispute.