Port of Long Beach Volume Plummets

Written by William C. Vantuono, Editor-in-Chief
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Port of Long Beach

The Port of Long Beach is attributing a large January 2023 volume drop, compared to the prior-year period, to “softened consumer spending, increased prices driven by inflation and a shift in trade routes.”

Dockworkers and terminal operators moved 573,772 twenty-foot equivalent units (TEUs) in January month, down 28.4% from January 2022, which was the Port’s busiest January on record. Imports decreased 32.3% to 263,394 TEUs; exports declined 14.2% to 105,623 TEUs. Empty containers moving through the Port were down 29%, to 204,755 TEUs.

“Economists say inflation is slowing for purchased goods and may offset rising prices for services, largely depending on how the Federal Reserve adjusts interest rates this year,” said Port of Long Beach Executive Director Mario Cordero. “We are taking aggressive steps to meet a new set of challenges for the new year. I remain optimistic that we will recapture market share and develop projects that will enhance our long-term growth, sustainable operations and the reliable movement of goods through the Port of Long Beach.”

“We’re confident we will grow cargo volume by working with our industry stakeholders,” said Long Beach Harbor Commission President Sharon L. Weissman. “We are focused on investing in infrastructure projects that will improve air quality and make us more competitive.” 

Labor troubles and West Coast congestion are contributing factors. The International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) are still at a contract stalemate (which also impacts the Port of Los Angeles), and that has benefitted U.S. East and Gulf Coast ports. Many shippers, it is believed, do not want to move their cargo back to the West Coast until a new union agreement is signed. As well, cargo moved away from the West Coast because of congestion. That congestion has been mitigated, but traffic has not returned to theWest Coast.

Blaze Sheds Light

“The factors contributing to volume decline at LA/Long Beach are numerous and complex,” explains Railway Age Contributing Editor Jim Blaze. “The logisticians that have supported U.S. importers over the past year decided to lower their risks from delayed inbound container cargo by accelerating the pattern change of China-Pacific Ocean to the U.S. West Coast via ships and then via U.S. railroad land-bridge stack trains to instead routing their containers through the Indian Ocean-Suez Canal-Mediterranean Sea-North Atlantic trade lane. Thus, a lot of Chinese cargo bound for the U.S. Midwest and Northeast/Southeast consumption markets now enters the U.S. via the Port of New York & New Jersey or Savannah or Norfolk, instead of LA/Long Beach. The full delivered price to a U.S. importing receiver is about the same, as is total transit time.   

Courtesy Gross Transportation Consulting

“This inbound receipt/distribution pattern is an insurance policy that offsets the disruption seen in LA/Long Beach throughout most of 2022. The impact on the U.S. railroads is a lower volume of containers to move between the West Coast ports and the Chicago/Memphis gateways and then further east. This is affecting Union Pacific and BNSF. Norfolk Southern and CSX might pick up some intermodal container movements between the Atlantic ports and the Ohio Valley/Chicago area. The shifting stack train pattern is not yet fully understood and too early to really measure. Bear in mind, also, that shorter-haul intermodal movements from the East inland are less profitable for railroads than long-distance moves like LA to Chicago.”

Courtesy John D. McCown, Blue Alpha Capital/The McCown Report
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