Port of LA records 11 straight months of declines

July was good — 24% better than June — at the Port of Los Angeles, but volume was still down 6.11% year-over-year.

The Port of LA moved 856,389 twenty-foot equivalent units in July compared to 912,154 TEUs in the same month in 2019. That brought the port’s seven-month total to 4,618,278 TEUs, down 15.3% from the 5,450,793 TEUs recorded between Jan. 1 and July 31, 2019.

“The July volumes were good — seventh-best month in our 114-year history here at the Port of Los Angeles,” said Executive Director Gene Seroka, attributing the improvement from June “mainly to some replenishment through our omnichannel distribution system, our warehouses and our retail marketplaces.”

Seroka said canceled sailings also have subsided. There were only two in July and just one is planned for August. No blank sailings have been announced for September. This comes after 40 voided sailings in the first quarter of 2020 and 23 in the second.

“The bottom line is that the July numbers were encouraging, but exports must pick up,” he said.

Seroka found nothing encouraging in exports. Loaded exports were down 21.7% in July year-over-year, from 161,340 TEUs to 126,354. For the first seven months of the year, exports were down 18.3%, from 1,070,020 TEUs to 874,463. 

“Exports continued their dismal performance,” he said. “Exports have been down 20 of the last 21 months, mainly on the heels of trade tensions with China and other policies.”

While Seroka was encouraged that imports were down only 4.3% year-over-year in July, they have been down from prior-year figures 10 of the past 11 months. Imports also were down 12.1% for the first seven months of the year compared to the same period in 2019.

The return of empty containers in July was down just 0.1% year-over-year. “So these recent months of June and July trending with stronger empty returns are signaling a modest uptick in expected imports from Asia to the Port of Los Angeles,” Seroka said, noting that empties are down 18.7% overall for 2020.

Total volume has declined for 11 straight months, Seroka pointed out. “The dubious record is 15 consecutive months during the recession of ’08 and ’09, and it’s not a record we want to break.” 

Preliminary data for August volume was looking good, Seroka said, adding that there are signs U.S. retailers are stocking up for the holiday sales season. Still, “there is no doubt the trade policies and COVID-19 continue to impact global trade.”

Shipping seasons have not shifted. At first, goods simply were delayed by coronavirus-caused factory shutdowns in China. Then Americans’ shopping patterns changed.

The month of May was absolutely dismal, down more than 30% year-over-year. So there was a point coming that we had to restock inventories, get warehouses back up to sustainable inventory levels and begin moving it out. Our big-box retailers, our home improvement stores continue to do very well during this pandemic, but we, as American consumers, simply aren’t buying as much as we normally do,” Seroka said.

“The upticks here are modest and we’re still down year-over-year as predicted and we are trending 15% below where we were at this time last year,” he said. “We continue to watch this very closely with the nation’s only port community system, the Port Optimizer, which gives us a deeper line of sight than most anyone so we can see the booking and demand signals from Asia much earlier upstream than others.”

Seroka does expect good volumes into September and then a traditional tapering around the beginning of October. “Suffice it to say, my guidance for the full year remains consistent and I still see that our demand side will be much lighter than what we’re normally accustomed to due to both the trade tensions and COVID-19.”

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Click for more American Shipper/FreightWaves stories by Kim Link-Wills.