LA, Long Beach ports see slower traffic in September, but still expect strong year

After 25 months of record-breaking cargo volume at the nation’s two busiest ports, the pace began to slow in September.

Both the ports of Los Angeles and Long Beach this week reported “soft” September cargo numbers, with storm clouds gathering over the nation’s economy and some shippers moving their goods to ports on the Gulf and East Coasts following the logjams that anchored waiting ships outside the gateway throughout much of the COVID-19 pandemic.

Adding to the slower traffic, port executives said, was that much of the holiday-related cargo that floods the ports during peak season in September was sent earlier than usual this year, resulting in high levels of retail inventory now already on store shelves and in warehouses.

“This year,” Port of Los Angeles Executive Director Gene Seroka said on Wednesday, Oct. 19, “peak season was June-July.”

The Port of Los Angeles saw a 21.5% decrease in cargo volume last month compared to September 2021, which was the port’s busiest September on record.

The Port of Long Beach, which released its latest monthly cargo data on Tuesday, Oct. 18, also reported a decline in twenty-foot equivalent units — the standard measurement for cargo containers — of 0.9% compared September 2021, attributing the decline, in a news release, to “diminishing consumer demand, full warehouses and inflation concerns.”

Seroka, speaking at his monthly virtual briefing Wednesday, said the LA port was still in line to end the year with strong cargo numbers.

“Despite what will likely be a soft ending to 2022, we are on track to have the second-best year in our history,” Seroka said, calling it potentially the “silver medal” year to 2021’s blockbuster, during which the port moved more than 10.7 million TEUs.

The Port of Los Angeles handled 709,873 TEUs in September and closed out the third quarter processing 7,864,514 TEUs during the first nine months of 2022, down about 4% from last year’s record pace.

The Port of Long Beach moved 741,823 TEUs of cargo containers last month.

“Consumers and retailers are concerned about inflation, leading to warehouses filled with inventory and fewer product orders from Asia,” Port of Long Beach Executive Director Mario Cordero said in a written statement. “The respite is leading to increased capacity on the docks and fewer ships waiting off the coast to enter the port.”

Joining Seroka at his monthly briefing, meanwhile, was Jay Timmons, president and CEO of the National Association of Manufacturers, who said the lingering contract negotiations between dockworkers and the Pacific Maritime Association continues to cause uncertainty, along with the ongoing lack of a signed contract with rail workers in a separate-but-also-ongoing process. The new deadline for rail workers is Nov. 19.

The International Longshore and Warehouse Union contract expired in July and talks have been ongoing with commitments from both sides not to participate in a strike or lockouts as negotiations continue.

“We’re doing a little bit more than ‘nudging’ both parties,” Seroka said, “but we’re very respectful of the collective bargaining process and keeping them at the table.”

Needed tax code reform and a national, bipartisan immigration policy, are other issues affecting the well-being of domestic manufacturing, Timmons said.

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“Most of our members, two-thirds, believe there is a recession that is looming so they’re very concerned about that uncertainty,” Timmons said. “This is an economy I don’t think any of us are familiar with, the employment picture is very different today and I’m not sure where that is leading.

“But an undercurrent among manufacturers is percolating,” he added, “there’s no doubt about that.”

Timmons added, however, that the two ports have managed to handle the pandemic cargo surge successfully.

“Your team responded well and implemented a handful of changes to help clear the shipping backlog,” Timmons said, addressing Seroka. “The congestion was frightening, frankly, a year ago. We weren’t really sure where that was headed.”

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