‘Unprecedented disruption’ to supply chain slams US port volumes

Not surprisingly the coronavirus pandemic delivered a heavy hit to U.S. port volumes in March. The unknown is how long the container drought will continue.

Northwest Seaport Alliance (NWSA) Chief Executive Officer John Wolfe said during a press conference Wednesday he expects second-quarter volumes will be soft as the “unprecedented disruption” to the global supply chain continues and container shipping lines cancel more sailings.

“Total container volumes in March were down approximately 21% as compared to March of 2019,” Wolfe said. “That brings our year-to-date first-quarter decline to 15.4%.”

The NWSA, which operates the ports of Seattle and Tacoma, Washington, said it handled 264,133 twenty-foot equivalent units (TEUs) in March. Full imports in March declined 28.2%, while full exports decreased 8.6% year-over-year.

Wolfe said container shipping lines canceled 32 sailings during the first quarter, including 19 in March alone.

“As of today, we anticipate an additional 19 canceled sailings as we look out into quarter two. However, this is a very fluid situation and these numbers could change,” he said.

The NWSA handled 788,882 TEUs between Jan. 1 and March 31, a 15.4% decline from the same period last year. Full imports and exports declined 19.3% and 4.9%, respectively.

Wolfe said he expects second-quarter total volume also to be “soft.” 

“That’s driven by the situation in the United States with the closure of many businesses and the consumer market demand being down over last year as a result of the economy being shut down,” he said. “With the anticipation that we will slowly open up the economy in the second quarter of this year, which of course is uncertain, we expect the third and fourth quarters will be stronger quarters in terms of total volume. 

“So we’ll wait and see what happens in the second quarter. That is our best forecast: that the third and fourth quarter could be much stronger,” Wolfe continued. “We’re hopeful that 2021 will be a much more robust year for us in terms of total cargo volumes and job creation and economic activity through the gateway.”

Other U.S. West Coast ports

The Port of Los Angeles, North America’s busiest container port, reported a year-over-year March volume drop of 30.9%.

The port said it moved 449,568 TEUs in March. That’s the lowest amount of monthly cargo moved through the port since February 2009.

March imports decreased 25.9% to 220,255 TEUs compared to the previous year. Exports decreased 23.8% to 121,146 TEUs. Empty containers declined 44.5% to 108,168 TEUs.

The Port of Long Beach also continued to feel the economic effects of COVID-19 in March, with more canceled sailings and a decline in cargo containers shipped through the nation’s second-busiest seaport.

Terminal operators and dockworkers moved 517,663 TEUs last month, a 6.4% decline compared to March 2019. Imports were down 5% to 234,570 TEUs, while exports increased 10.7% to 145,442 TEUs. Empty containers shipped overseas dropped 21% to 137,652 TEUs.

The coronavirus was blamed for 19 canceled sailings to Long Beach during the opening quarter of 2020. That contributed to a 6.9% decline in cargo shipments compared to the first three months of 2019, port officials said.

The Port of Oakland reported Monday that global trade weakened by the coronavirus pandemic resulted in a year-over-year 10.3% container import decline in March.

The return of empty containers to Asia dropped 23%, the port said.

In other March year-over-year figures, the number of ships calling Oakland decreased 10.6%, loaded container volume at the port declined 7.4% and export container volume dipped 5%.

Gulf Coast

Port Houston, the largest container port on the U.S. Gulf Coast, said container activity began slowing in late March as expected due to the pandemic.

Port Houston in March handled a total of 248,280 TEUs, a drop of 11% compared to March 2019, when 280,721 TEUs were recorded. For January through March, however, the port handled 773,087 TEUs, compared to 694,167 TEUs for the same period last year. That is an increase of 11% for the first quarter.

The port said it had seven voided sailings in March.

East Coast ports

The Jacksonville, Florida, port saw a 21% drop in roll-on/roll-off (ro-ro) shipments year-over-year in March.

JAXPORT also reported an 8% drop in container volume in March year-over-year. Container volume for March was 14% below what had been budgeted for the month. 

“Despite a drop in these volumes in March, revenue held steady,” said Chelsea Kavanagh, JAXPORT public information officer. “We do anticipate seeing a sharper revenue impact in April, May and June. The extent of that impact is still to be determined. We are working closely with our ocean carriers and tenants to monitor the situation and prepare.”

Kavanagh told American Shipper that JAXPORT’s “diversification model played an important role in reducing the impact on our revenue last month. For example, a large U.S. military cargo move took place in March, which helped offset some of the drop in commercial cargo volumes. We also saw an increase in demand in our forest products business.”

Kavanagh also said to help northeast Florida companies better manage cash flow during the coronavirus crisis, JAXPORT is deferring the application fee for Foreign Trade Zone (FTZ) No. 64 applications received by July 31.

New FTZ customers can defer the one-time $2,500 application fee for 90 days from the application date.

An FTZ is a secured site within the United States but technically considered outside of U.S. Customs’ jurisdiction, allowing shippers to clear cargo as it leaves the FTZ while saving on import clearance costs.

The South Carolina Ports Authority said in a press release Tuesday that it remains positive about the long-term outlook, although March year-over-year volumes were down and the SCPA will not meet the fiscal year container plan.

Loaded imports totaled 76,019 TEUs, an 18.1% drop from the 92,875 TEUs recorded in March 2019. Loaded exports were down 6%, from 77,704 TEUs in March 2019 to 73,077 TEUs this year. Empties shipped were down 16.1% year-over-year, from 43,534 TEUs to 36,536 TEUs.

March operating earnings plummeted 41.8%, from $4.13 million in March 2019 to $2.41 million last month.

In its press release, the SCPA shared year-over-year fiscal year results for March, reporting that more than 1.82 million TEUs had moved across the Port of Charleston’s Wando Welch and North Charleston container terminals thus far in fiscal year 2020, from July through March, up 2% from the same period a year ago.

“Vehicle and breakbulk volumes were strong in March,” the SCPA said, citing the movement of 24,755 vehicles in March and 174,095 vehicles thus far in fiscal year 2020, up 27% from a year prior.

Year-over-year, the vehicle segment was up 34.3% from the 18,443 moved in March 2019.

In the breakbulk segment, the SCPA handled 73,342 pier tons in March for a total of 541,661 pier tons in the fiscal year to date. That’s up 23% year-over-year, the SCPA said. For March year-over-year, breakbulk was up 29.3% from the 56,733 pier tons handled in 2019.

The SCPA has revised its container outlook for fiscal year 2020, which runs from the beginning of July 2019 to the end of June 2020, to 1.345 million pier containers. Total 2019 fiscal year volume was 1.364 million pier containers.

“It has become increasingly clear since the end of Chinese New Year that the COVID-19 manufacturing shutdown in China and the subsequent significant shutdown of the consumer economies in the U.S. and the Western world means that we will not achieve our fiscal year 2020 volume plan,” SCPA President and CEO Jim Newsome said in a statement.

Newsome added that despite the current economic environment, he remained “very positive about the long-term outlook for both the Southeast port market and the South Carolina Ports Authority in view of a number of business development initiatives, which are ongoing.”

The SCPA had recorded its best February ever this year for both cargo volumes and rail moves at its inland ports. When reporting February volumes in early March, Newsome said the SCPA still anticipated “a rebound in May and June to finish the year above plan.”

The Port Authority of New York and New Jersey (PANYNJ) is still compiling March volume data, according to Amanda Kwan, senior public information officer.

Kwan did say the port authority recorded 13 blank sailings in March. The PANYNJ made international news in March first with the announcement that Executive Director Rick Cotton had tested positive for the coronavirus and then with the arrival of the hospital ship USNS Comfort in New York Harbor late in the month to provide relief to area hospitals overburdened with COVID-19 patients.