on Friday morning local time in the United States, the two major ports in the West-Los Angeles and Long Beach-held a press conference to release their poor import and export data for February.
Although the are all expected to decline, in the face of the final statistics, Gene Seroka, executive director of the Port of Los Angeles, admitted at a press conference, "the decline is really too big!"
data show that in February, the total throughput of Los Angeles Port was 487,846TEU, down 43% year on year. Among them, the import volume dropped to 249,407TEU, down 41% year on year and 33% month on month. Even compared with February 2019 before the epidemic, the drop reached an astonishing 28%
The total throughput of Long Beach Port was 543,675TEU, of which the import volume was 254,970TEU, down 35% year on year, 3% month on month and 16% lower than that in February 2019
for the reason for such a sharp drop in port volume, Gene Seroka, executive director of the Port of Los Angeles, attributed the "sharp drop" in the Port of Los Angeles's February data to the following factors at a press conference last Friday:
The decline in demand is a "global phenomenon";
U.S. inventory levels remain too high;
ongoing West Coast labor negotiations;
Lunar New Year holidays "caused a more severe impact than usual, with longer factory closures and an overall reduction in orders"
The port labor contract between the American West Port Union and the employer expired on July 1, 2022. "The owners have made it clear that they want the certainty of signing the agreement," Seroka said."
But when asked about the progress of reaching an agreement, Seroka admitted, "I don't know if we are closer."
Meanwhile, Seroka, as executive director of Los Angeles Port, expects throughput to reach nearly 600000 TEUs in March, up more than 20% from February. However, Los Angeles's total throughput in the first quarter is expected to drop 33% year-on-year, down 21% from the five-year average.
How many goods did LA/LB lose?
How much cargo did lose for Los Angeles/Long Beach Port?
Southern California ports are optimistic that once the labor contract is finalized, the labor interruption will not happen again and shippers will bring the volume back to the West Coast.
, the opposite view is that most of the volume transferred to the east and Gulf Coast will be gone forever.
concerns about port congestion and labor unrest may have contributed to the initial decision to move goods to the east coast, where new supply chains are now ripe and importers will stick with them even after a labor deal is reached on the west coast.
Nerijus Poskus, vice president of ocean strategy for Flexport, said in an interview with the media: "I think a lot of the changes from the west coast to the east coast are permanent."
"Many importers used to have only one distribution center (DC) or warehouse on the West Coast, where they made international transportation from Asia to Southern California, and then started nationwide transportation from the distribution center. But because of what happened in the last two years, they were forced to sign up with another DC on the East Coast," the said."
"They can move back, but why do they move back? Most of your customers are on the East Coast, and you end up shipping goods from the West Coast to the East Coast anyway. Now you have new supply chains, and they are not necessarily more expensive, because although you increase your international costs, you reduce your domestic costs."
"Beyond that, there are more shipping services to the East Coast than ever before, and ocean shipping between the East Coast and the West Coast is now very little. It's almost unheard of for an operator that the price has dropped to $850/FEU. But it's nothing compared to the cost of shipping goods across the country."
Poskus said: "So, I think this situation will continue and people are used to this new reality. I don't think it has much to do with the risk of a strike on the West Coast, and I don't think the West Coast share will be fully recovered."
Source: One Shipping