Port of Los Angeles Executive Director Gene Seroka called for a national export program to narrow the trade gap between the United States and China during an appearance on CNBC’s “Squawk Box Asia” this week.
“We are now at five imports to every export and that’s the widest trade gap we’ve witnessed at the Port of Los Angeles in some time,” Seroka told hosts Rosanna Lockwood and Sri Jegarajah on Thursday.
He said that import-export imbalance puts pressure on the port’s service providers and does not help put Americans back to work as the economy reemerges following the worst of the coronavirus pandemic.
Asked what he would like to see from the White House, Seroka answered that change doesn’t happen overnight, but “we would like to see an infrastructure play and a broad look at what a multimodal funding program would be for the supply chain here in the United States.”
Container volumes at the Port of LA have changed since the height of the pandemic last spring. The largest container port in the Western Hemisphere had its best month ever in August, handling 961,833 twenty-foot equivalent units (TEUs). It was a welcome influx. As recently as May, port volume was down 18.6% year-over-year, largely a side effect of the COVID-19 pandemic.
“We’re still grappling with the trade tensions between the United States and China and obviously the shuttering of the American and global economies by COVID-19. But we are seeing the replenishment of inventory through the omnichannel distribution network, mainly for our big-box retailers, home improvement stores and others who remained open during the emergency orders,” Seroka said.
He said the recent upturn spurred him to revise the port’s full-year forecast to 8.5 million containers from the 7.9 million predicted when reporting May’s volume.
“We looked into the abyss of March this year and now cargo flow is double what it was in that month,” Seroka said.
The fall looks “strong,” he continued, with the Port of LA expected to handle about 900,000 TEUs in September and approximately 800,000 in October.
“Early indications for November are a little bit better than expected so this replenishment will continue on the import side, but exports still wane. They’ve been down 21 of the last 22 months here in the U.S.,” Seroka said.
As he did at last week’s American Shipper Global Trade Tech forum, Seroka touted the need for digitization of the port industry.
Seroka said he can look to the horizon thanks to “The Signal, which is a control tower view here at the Port of Los Angeles powered by our community system, the Port Optimizer, that gives us that view not too many others have right now, so we can see upstream volume that will be heading our way. We can plan staffing and assets but, more importantly, also give information to the marketplace to what we’re seeing as a leading economic indicator.”
Launched in 2017, Port Optimizer is a cloud-based solution designed to enable ports and the supply chain to operate more efficiently.
“The only thing is we need to see others adopt this same digitization strategy and that’s why I’ve called for a national port community system, one that can set agreed upon standards with open architecture to allow for our importers and exporters to have choice and visually look through that one screen to consign containers with rail, truck and ship service and allow them to reconnect with their overseas customers. This is a piece of work that is crucial to our nation’s competitiveness,” Seroka said.