New York’s leading position highlights volatility

The port of New York/New Jersey is claiming to be the largest port complex in the US, having overtaken the Port of Los Angeles in terms of TEU throughput.

The claim is only partly true as the combined figure for Los Angeles and Long Beach is still very much higher. However, the New York/New Jersey port authority asserted in a press release last week that it has seen “a double-digit increase of cargo volume compared to pre-pandemic August 2019. The seaport was the busiest in the nation in August and marked 25 straight months of monthly cargo growth”. In the year-to-date in August, the volume of TEUs handled rose to 6.5m, a year-on-year growth of 9.9%. Loaded imported containers were up by 10.2% as compared to last year. In contrast, the Port of Los Angeles saw a fall of 15.6% in total volume of containers handled and a fall of 16.5% of loaded imported containers in August as compared to August 2021.

The explanation for the diverging trajectories is not clear. The growth in East Coast traffic during 2021 and 2022 was driven in great part by shippers looking to avoid the congestion on the West Coast. However, the problems within terminals and landside transport have eased considerably at Los Angeles and Long Beach, yet shippers are still routing more traffic through New York as well as the Georgia and Gulf Ports.

It may be that the ports of the West Coast have simply picked-up the trend towards falling container demand more quickly than the East Coast terminals. Consumer sentiment is muted, with the US economy possibly facing a recession and the peak season is far from vigorous.

That said, the leap in the value of the US Dollar cannot be ignored. The implication of the rise in value of the currency is that despite wider economic conditions, exports will increase and this might moderate any fall in import volumes. What the impact of this will be on ports is worth speculating on. It could be suggested that the rise in Dollar might replicate some of the imbalance between imports and exports seen in 2021, with all the implications that had for congestion.

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Source: Transport Intelligence, 27th September 2022

Author: Thomas Cullen