From 2020 through to the second quarter of 2022, the port of Los Angeles was at the centre of the congestion and price inflation storm that hit the container shipping sector. Things today are very different.
In his monthly report, the port’s director, Gene Seroka, outlined how volumes at Los Angeles have crashed. Container volumes fell year-on-year by 25%, whilst the total for the year so far to October was down by 6% at 8,542,944 TEUs.
Mr Seroka cited “three basic factors for this steep decline”. The biggest is “cargo that is shifted to the to the Eastern and Gulf coast due to protracted labour negotiations. The second, this year our peak season was in June and July as cargo owners advanced shipments well ahead of the normal holiday cycle. And third, we saw an increase in durable purchases during COVID like appliances and furniture but consumers just don’t buy these types of products every year.”
The benefit of this slide in activity is the ending of congestion at the port. “Dwell times have improved and our backlog has nearly gone. We estimate that our container terminals are only at about 70% of capacity now”. Gene Seroka said that he was desperate to get these container volumes back-up, “when it is working right the best route from Asia to the US is through the port of Los Angeles”. At present he is faced with an up-hill task, with Los Angeles anticipating a further 20 blankings of sailings in November and December.
What is remarkable about this situation is the role that the East Coast ports seem to have played. Even New York, which is far from the most modern complex in the US, has benefited from the shift away from Los Angeles. Nervousness about the vulnerability about operations at the port seems to be focussed on the West Coast, with negotiations with trade unions precipitating that nervousness. Yet both the port management and the local politicians are asserting that the negotiations are proceeding and there is no reason for shippers to be concerned. It seems that shippers don’t quite believe them.
Source: Transport Intelligence,17th November 2022
Author: Thomas Cullen
Supply chain strategists can use GSCi – Ti’s online data platform – to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry.
Visit GSCi subscription to sign up today or contact Michael Clover for a free demonstration: [email protected] | +44 (0) 1666 519907