Los Angeles imports continue to fall as the East Coast continues to gain ground

The Port of Los Angeles on Tuesday reported another month of falling volumes as the import pendulum continues to swing away from the West Coast and toward the East and Gulf Coast container shipping gateways.

Total Los Angeles throughput in October was 678,429 20-foot units, down 25% from October 2021.

Imports totaled 336,307 TEU, down 28% year-on-year.

It was the lowest October import balance since 2009 amid the global financial crisis and the lowest monthly imports since May 2020 at the height of the COVID lockdowns. Imports this October were down 14% from pre-pandemic October 2019.

On a positive note, the huge monthly decline seen in Los Angeles in September has slowed. Imports fell 15% in September compared to August. Imports in October fell by only 7,155 TEU (ie a single shipload) or 2% from September.

(Graphic: American Shipper based on Port of Los Angeles data)

During Tuesday’s news conference, Port of Los Angeles executive director Gene Seroka said airlines “blanked” (cancelled) 20 departures in October, accounting for about 25% of normal service. Another 20 departures were hidden together in November and December.

“November numbers will be weak, and so will December,” confirmed Seroka.

“We need labor peace”

Seroka blamed three factors for the “steep decline”: a lack of a West Coast dockwork contract, an early peak season, and lower consumer spending on durable goods compared to purchases during the pandemic.

Both Seroka and Los Angeles Mayor Eric Garcetti repeatedly highlighted the labor issue during the press conference. The previous West Coast port labor contract expired on July 1.

Seroka said he’s been on a “whistlestop tour” and has been “knocking on doors,” speaking to shippers and shippers in the US, Asia and Europe, and “trying to get that allocation back to Los Angeles.” But he admitted that “it starts with entering into an employment contract … where they feel the certainty of cargo flow and get to market on time.”

Garcetti stressed: “We must create industrial peace and reach an agreement.” However, he insisted that “there will be no strike. I’m not saying this as someone trying to market [Los Angeles]but the problems that remain are so much smaller than in previous years when we were able to solve the problem.”

Regarding the shifting of cargo to the East Coast and the Port of New York/New Jersey, which recently overtook Los Angeles as America’s busiest port, Seroka said, “We’ve been here for 22 straight years and a year or two at number 1 months [in second place] will not create a trend. Our dwell times have improved and the ship jam is almost gone. We are striving to increase the volume again.”

Long Beach sank worse month-on-month than LA

The decline in Los Angeles was mirrored in the neighboring port of Long Beach, highlighting the pressures facing West Coast ports.

On Thursday, Long Beach reported a 24% year-on-year drop in imports to 293,924 TEU. It was the port’s lowest import count in any month since April 2020, at the start of the pandemic. It was Long Beach’s lowest import total for the month of October since 2012, down 13% from pre-pandemic October 2019.

(Graphic: American Shipper based on Port of Long Beach data)

October imports fell 48,747 TEU or 14% in October from September, a much steeper month-on-month decline than Los Angeles.

Ports on the east coast take more market share

The import picture in the East and Gulf Coast ports continues to be in stark contrast to the situation in the West Coast ports. These ports are still near their all-time highs.

On Monday, Savannah, Georgia, reported October imports of 263,828 TEU, the second-best monthly total ever behind the record set in August. It was the port’s best October ever for imports, up 2% year-on-year and up 32% from October 2019 pre-COVID.

(Graphic: American Shipper based on Georgia Ports Authority data)

Savannah recorded an increase of 53,461 TEUs or 25% in October from September when imports were depressed by the closure of Hurricane Ian.

In its monthly release in October, the port said it expects to vacate its anchorages by the end of November. That is too optimistic: On Tuesday, 33 container ships were still anchored off the coast of Georgia.

The Port of Charleston in South Carolina also reported its October throughput on Monday. Imports shipped totaled 121,305 TEU, an increase of 13% yoy, 7% mom and 27% compared to October 2019 before the pandemic. It was Charleston’s best-ever October for imports and the fifth-highest monthly import total.

(Graphic: American Shipper based on data from South Carolina Ports Authority)
Due to higher demand and greater congestion, East Coast spot rates have not fallen as rapidly as West Coast rates. Blue Line: Shanghai-Los Angeles. Green Line: Shanghai-New York (Graphic: FreightWaves SONAR)

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