POLA and POLB report February volume declines

Difficult annual comparisons and reduced consumer demand were instrumental in driving down respective February volumes, at the Port of Los Angeles (POLA) and the Port of Long Beach (POLB), according to data recently issued by the ports.

POLA reported that February volume—at 487,846 TEU (Twenty-Foot Equivalent Units)—were down 43% compared to February 2022, the port’s all-time record, for the month. Imports—at 249,407 TEU—were down 41% annually, and exports—at 82,404 TEU—fell 14%. Empty containers fell 54% annually, to 156,035 TEU. Through the first two months of 2023, total POLA volume—at 1,213,860 TEU—is off 30% compared to the same period a year ago.

“February declines were exacerbated by an overall slowdown in global trade, extended Lunar New Year holiday closures in Asia, overstocked warehouses and a shift away from West Coast ports,” said POLA Executive Director Gene Seroka in a statement. “While we expect more cargo moving crossing our docks in March, volume will likely remain lighter than average in the first half of 2023.We’re using this volume lull to focus on new data and infrastructure initiatives to improve efficiency in preparation for increased throughput.”

On a media conference call late last week, Seroka said that February’s volume tally represented the lowest monthly output since March 2020, at the onset of the pandemic. He explained that POLA handled 61 container vessels in February compared to 93 in February 2020, coupled with 30 cancelled sailings, akin to the early days of the pandemic, with volume, for the month down nearly one-third compared to the port’s five-year February average.

Addressing the factors currently impacting global trade activity, which is reflected in the port’s numbers, Seroka noted it is, in a sense, a global phenomenon, in a way.

“We may not be at the height of the pandemic but there are more container vessels sitting idle around the world today than at any time since it began, and spot container rates have decline to nearly three-year lows while the demand is just not there,” he said. “U.S warehouses remain largely full, and retailers must clear inventory levels before the next wave of imports arrive, but with the economy on everyone's mind and consumers continuing to feel the pinch of inflation, older inventories are simply not moving fast enough. This past Lunar New Year packed a harder punch than usual factories were closed longer and orders were weaker overall. Because Lunar New Year hits the calendar differently each year, overall first quarter data gives a truer picture of the market than just a monthly comparison. That said, the first quarter will be soft, likely down a third over last year, and 21% below our five-year average. in addition to those macroeconomic factors here on the West Coast, we're still dealing with the effects of the ongoing Longshore labor negotiations. Cargo owners have made it clear that they want the certainty of a signed deal.”

Looking ahead, Seroka said he expects POLA to continue to see lighter volumes, particularly compared to the record volumes recorded over the first half of 2022.

Even with the expected declines, he said that there are some reasons for optimism, with the Lunar New Year complete, coupled with an easing of Covid restrictions in China, which is expected to result in an uptick in overseas production.

“Many of those idled containers…are well positioned off the coast of China, waiting for cargo,” he said. “There's also been a recent bump in the number of vessels headed toward the San Pedro Bay in February. We saw a lull, but current ship activity is moving closer to normal, now that factories are back online. Based on our forecasting data I expect the Port of Los Angeles volume in March to be close to 600,000 TEU, up more than 20% over February. It's important that we see a spring agreement between the Longshore workers and the Pacific Maritime Association. We really need that in order to start bringing cargo back to Los Angeles. Many cargo owners want to see a labor deal before they bring more volume back here. So, if we get a contract soon, those importers will take notice.”

POLB data: The Port of Long Beach reported that total February volume—at 543,675 TEU—dropped 31.7% annually, up against its highest-volume February on record, for the port.

Imports—at 254,970 TEU—were off 34.7% annually, with exports—at 110,919 TEU—down 5.9%, Empty containers fell 38.3%, to 177,787 TEU. Through February, total volume—at 1,117,448 TEU—is down 30.1% annually.

“Trade continues to normalize following the record-breaking cargo numbers we saw at the start of last year,” said Port of Long Beach Executive Director Mario Cordero in a statement. “We are investing in infrastructure projects that will keep us competitive as we collaborate with industry stakeholders to focus on trade volume.”

POLB officials said that 2023 started stronger than anticipated, but shifts in trade routes and increased prices driven by inflation contributed to a decline in shipments as retailers continued to clear warehouses.