Port of Los Angeles March volumes see annual declines

Data issued by the Port of Los Angeles (POLA), at a virtual press conference held today, showed a decrease in March cargo volumes handled by the port.

Total March volume—at 623,233 TEU (Twenty-Foot Equivalent Units)—came in just over the port’s initial expectations for the month. While this marked a 35% annual decline, POLA Executive Director Gene Seroka said that it was up against the highest-volume March on record for POLA.

And when looking at March volumes on a five-year average basis, Seroka observed that this March was down more than 13%, which he said is concerning. But on a more positive note, he said that March volume was up 13% compared to February, with the number of cancelled sailings down from 30 in February to 18 in March.

POLA March imports—at 319,962 TEU—was down roughly 35% annually, with exports—at 98,276 TEU—down 12%. Empties—at 204,996 TEU—saw an annual decline of almost 42%, as the demand for containers in Asia has subsided, according to Seroka.

Total first quarter volume came in at 1,837,094 TEU, down 32% annually, with the first quarter 2022 marking the best first quarter in POLA history.

“Compared to our average first quarter volume over the last five years, we are down 19%,” said Seroka, calling it a “disappointing trend that needs to be reversed.”

What’s more, in recent months, Seroka said POLA has discussed reasons for the decline in volumes, which remain constant, including widespread concern over the West Coast port labor negotiations that intensified late last week; high interest rates and the rising cost of living continuing to impact discretionary spending, even with the March Consumer Price Index number released today coming in lower than expected, with inflation seeing declines over the last nine months; and retailers still bearing the warehousing costs of elevated inventories and easing back on importing more goods.

And he added that in the manufacturing sector, market uncertainties have led to back-to-back factory order declines in January and February.

“Our numbers reflect the complex mix of micro and macroeconomic undercurrents,” said Seroka. “Still, I continue to believe that there are bright skies ahead as these factors ease over the coming months.”

For April, POLA is forecasting gradual volume growth, from March to April, despite the current headwinds, noting that March improved over February, with Seroka noting that POLA preliminary data is indicating that April volume is projected to come in at around 700,000 TEU, which would mark another significant month over month gain. But in comparison to the monthly records set at POLA in the second quarter of 2022, these numbers will look relatively light through July. But, from that point on, he said POLA is expecting a more traditional peak shipping season, with a moderate volume uptick in the third quarter.

Cargo operations pause: Addressing the temporary pause in cargo operations late last week, Seroka said that POLA and the Port of Long Beach (POLB) saw little movement of good on last Thursday’s night-side and Friday’s day-side shifts.

“On Thursday, the ILWU’s routine first of the month stop work meeting was held, during which the new president of Local 13 Gary Herrera was installed, taking over for Ramon Ponce de Leon,” he said. “The collective bargaining agreement between the union and the employees guarantees these monthly meetings, which are dedicated to addressing the union’s proceedings. Friday’s first shift also concluded with little work at cargo terminals, and then operations returned to normal on Friday evening. Good Friday typically sees lower volume of activity during the morning shift so the impact to operations was relatively minor, however, the situation captured the nation’s attention and rightfully so. It is a reminder that a negotiated labor agreement is crucial in our efforts to regain shipper confidence and bring the cargo back to LA.”

While POLA does not have a seat at the bargaining table, he said the port is closely monitoring the situation on a daily basis and maintaining communication with Acting Labor Secretary Julie Su, officials at the state, local, and federal levels, along with representatives from both sides of the negotiations. And he said there is no bigger priority right now than this contract agreement.