Pier 300 Port Los Angeles Airport.
By Mike Wackett 05/22/2023
According to the latest McCown report, US west coast ports saw container imports fall 22% in April from last year’s record volumes to 812,611 teu, as economic woes and protracted collective bargaining continued to take their toll on throughput in the Pacific ports.
In fact, Port of Los Angeles chief executive Gene Seroka said last week that terminals at the port were operating at just 70% of their regular capacity, blaming the economy for 15% of the underutilization while estimating 15% was on concerns industrial action related to shifting forwarding of orders to East Coast and Gulf Coast ports.
Mr Seroka said it would “take months” to persuade shippers to use West Coast ports again once a new Labor deal is in place, but on that issue he was “optimistic that we will have good news soon.” will hear”, and said: “we are close to a preliminary agreement.”
Elsewhere, major US East Coast ports saw container imports fall 20% to 887,950 teu, taking the total volume of import containers handled by the top 10 US ports to 1.7 million teu in April, down 21% from April same month corresponds to the previous year.
Further evidence of the fall in US imports due to increased demand last year is the three-month figure for inbound containers in the McCown report, which stands at 4,689,195 teu, down 26.7%.
On the west coast, Los Angeles recorded the largest drop last month, falling 24.7% to 343,688 teu, while on the east coast, the Port of Charlston’s imports fell 28.2% to 101,024 teu.
Los Angeles narrowly held onto its top spot in April, but the Port of New York and New Jersey is poised to usurp it from its long-standing top spot with 331,563 TEU container imports last month.
Nevertheless, Mr. Seroka is optimistic for a better second half.
“If economic conditions improve and we get an employment contract, that will definitely help increase our volume,” said Mr. Seroka.
“But despite the economic uncertainty, I expect an improvement compared to the first half of the year.
“We are prepared for the next surge in cargo whenever it comes,” said Mr. Seroka.
However, the executive said there is “a lot more work to do” in reducing inventories “until we see a more normal freight rhythm across the transpacific.”
Meanwhile, container spot rates on the trade have been relatively stable in recent weeks, having previously abandoned much of carriers’ GRIs from mid-April, and now shipping companies are looking to roll out a new GRI they hope will help them at the completion will help some of the outstanding contract negotiations.
In fact, The Loadstar understands that several airlines, including Zim and CMA CGM, are proposing to introduce GRIs of up to $1,000 per 40 feet on the transpacific, effective June 1.
Notwithstanding the acceleration of their contract negotiations, shippers are keen for freight rates to be raised ahead of the start of the traditional high season in July.
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