Port of Long Beach and Port of Los Angeles volumes show modest July gains after a hectic June

Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.

Total POLB volumes saw a 3.7 percent annual gain at 583,060 TEU (Twenty-Foot Equivalent Units and were down from June’s 610,516 TEU.

Imports were up 0.9 percent at 297,615 TEU, and exports dropped 6.2 percent to 124,126 TEU. Empties saw a 19.5 percent increase at 161,319 TEU.

On a year-to-date basis, POLB volumes are up 2.7 percent at 3,886,192 TEU. Imports are up 3.3 percent at 1,996,338 TEU, and exports are up 0.3 percent at 977,224 TEU.

Total POLA volumes in July were up 0.25 percent compared to July 2013 at 717,407.00 TEU. 

POLA imports, which are primarily comprised of consumer goods, were down 1.98 percent at 363,393.50 TEU, and exports rose 3.62 percent to 163,294.50 TEU. Empty containers were up 1.82 percent at 190,719.00 TEU.

For the first seven months of the year, total POLA volumes are up 7.75 percent at 4,769,634.55 TEU.

“This July was on par with last July,” said POLA Director of Media Relations Phillip Sanfield in an interview. “Since additional cargo moved through L.A. in the last few months, it’s not a surprise that July remained steady compared with last year. We’re very pleased with how the year has shaped up seven months in.”

Hackett Associates Founder Ben Hackett wrote in Port Tracker report his firm publishes with the National Retail Federation the that even with import levels high because of the uncertainty surrounding the West Coast port labor situation, trade volumes are in a good place, due to U.S. GDP increasing in 11 of the last 12 quarters.

Hackett explained that a significant proportion of the import gains is due to the labor negotiations, with importers moving up shipments just in case, as well as an increase in private consumption, with consumer spending up 2.5 percent in the second quarter.

“The impact of this is that the Peak Season will be muted, suggesting that the monthly growth rates will be less than the seasonal norm,” he wrote. “Due to the jump in July imports, our West Coast projections were well up but not strong enough as we had anticipated more of a shift to the all-water route. Clearly, economic fundamentals are no match for cautionary measures to safeguard against labor relations.”

In an interview with LM, Hackett said it is likely that the June and July inventory-to-sales ratio will show an uptick, due to importers bringing in large amounts of cargo early.

KeyBanc Capital Markets Analyst Todd Fowler wrote in a research note that it was anticipated heading into July that container imports at both ports would slow down in July on the heels of what he called accelerated activity in June.

“The decrease was not as large as we previously expected,” he wrote. “On a combined basis, import volumes during June and July increased 6 percent, in line with the year-to-date increase of 6.2 percent. While we expect weakness into August as shipment activity continues to normalize, stronger than expected July volumes potentially signal stable underlying demand, supporting expectations for mid single-digit growth in late 3Q14 and early 4Q14. That said, restocking is dependent on retail sales trends, which remain tepid, potentially resulting in elevated inventory levels following stronger import volumes year-to-date.”