The country’s largest container port just had its busiest May on record after import volumes rose and exports started to recover from recent doldrums. The Port of Los Angeles imported more than 400,000 cargo containers in May, up 15 percent from May of last year.
Dockworkers exported another 160,000 cargo containers in May, a 6.3 percent increase over the same month last year. The total volume exported in May was only slightly above levels seen in 2014, which suggests that a weakening dollar is not helping exports as much as experts hoped.
For the first five months of the year, exports out of the Port of Los Angeles were down nearly 11 percent compared to the same period in 2014. Exports did, however, beat out record-lows seen early last year, when dockworkers’ strikes slowed down many West Coast ports. Last year’s strong dollar did not help matters, making American-made goods more expensive for foreign markets.
Port of Los Angeles Director Gene Seroka stated, that the upturn in cargo comes as retailers are stocking up their shelves for the fall. The port’s busiest shipping season usually peaks in August or September, says Seroka. Other California ports like Long Beach and Oakland are also reporting improved import and export levels. The Port of Long Beach reported hitting its highest-level of import and export containers in May since last year’s peak in August. Long Beach dockworkers handled more than 330,000 import cargo containers and 138,000 export containers.
Compared with 2014, however, exports from the Port of Long Beach were down by nearly 15 percent. Imports in the first five months of the year were down 1.5 percent compared to 2015. Ongoing labor negotiations between dockworkers and port managers has created a backlog of ships waiting weeks in some cases for loading and unloading.
A weakening dollar and resolving labor negotiations should help increase throughput at California’s ports, but there’s some old competition making a comeback. The Panama Canal is set to open its expanded channel in late June which will allow larger container ships to pass through. Some carriers say they are already planning to use the upgraded Panama Canal to bypass West Coast ports altogether to ship goods to the East Coast. That could hurt California ports as well as trucking companies, who have gotten most of their lucrative contracts to ship goods from Asia cross-country to East Coast cities.
According to Alphaliner, a container shipping research group, shipping capacity from Asia to the West Coast is set to decline three percent this summer. Shipping capacity from Asia to the East Coast, on the other hand, is projected to grow by 4 percent. The peak of shipping at Port of Los Angeles in May could be the beginning of a downturn as carriers cut capacity and slash rates and stay competitive with the new Panama Canal.
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(all data current as of 10/17/2017)
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