Cargo congestion issues that roiled the ports of Los Angeles and Long Beach during the height of the pandemic have eased as consumer demand wanes, causing a retrenchment of import volumes.
The declines at the neighboring West Coast ports are being driven by several factors that caused the Port of Los Angeles in September to record its second double-digit import decline of 14 percent year-over-year to 709,873 twenty-foot equivalent units (TEUs). The Port of Long Beach, meanwhile, recorded a 7.4 percent September decline in imports compared to a year ago, totaling 342,671 TEUs.
The drops come during what is historically a busy time for shippers preparing for the holidays.
“Traditionally, September was a high-volume month for end-of-year products,” Port of Los Angeles executive director Gene Seroka said during a news briefing Wednesday. “This year, our peak season months were June and July.”
He pointed to concerns over the economy and the ongoing labor contract talks for West Coast dockworkers, who have been working without a new agreement since the previous one expired July 1.
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More recent rumblings of potential snags in those discussions due to a dispute over the awarding of work in the Pacific Northwest have further fueled concern about a potential slowdown in cargo movement on the West Coast from shippers closely monitoring the situation.
“Shippers are routing more cargo through the East and Gulf coast,” Seroka said. “That’s likely to continue until a West Coast labor contract is in place and that can’t happen soon enough.”
It remains to be seen whether that re-routed business returns to the West Coast once a new agreement is struck, or if those shifts to alternate facilities become permanent. It was a question Seroka fielded during this week’s briefing.
“…I’m pretty competitive and I don’t want to lose a pound of freight to anybody else,” Seroka said. “There’s always a concern. You want to stay ahead of the market and ahead of the game. As cargo finds its way to other ports and gateways, it’s going to be a challenge to bring it back, but we’re going to do our level best on all areas and we’ve got a great coalition of partners to do just that, including our employers association and dockworkers that will be hungry to make sure that that cargo comes back as well. So, we’ll be going all out.”
The Port of Savannah, which has seen record cargo numbers as it benefitted from shippers re-directing their West Coast-bound cargo elsewhere, saw softening imports itself during the month of September when they totaled 210,367 TEUs. That compares to 233,275 TEUs in September 2021.
The Georgia Ports Authority (GPA) said it expects growth to “moderate” as the year goes on in response to what executive director Griff Lynch said are “signs of a correction in the market.”
“We’re expecting a gradual easing in demand based on several factors, including a shift in the balance of consumer spending away from goods and back to services, and the impact of inflation on the economy,” GPA board chair Joel Wooten said in a statement earlier this month. “After having increased trade at a compound annual growth rate of 14 percent over the past two fiscal years, this change will represent a return to a more typical rate of growth for GPA.”
Port of Long Beach executive director Mario Cordero echoed the sentiment in a statement Tuesday, following the release of the September numbers.
“Consumers and retailers are concerned about inflation, leading to warehouses filled with inventory and fewer product orders from Asia,” Cordero said.
He went on to say Long Beach aims to cap the year “on a positive note” in relation to cargo fluidity.
Meanwhile, Seroka at the Port of Los Angeles said October numbers are likely to come in “soft.”