Port of Los Angeles has Slowest October in 13 Years

After a nearly two-year surge in volumes at the Southern California ports, they are experiencing strong declines and for the first-time executives at both ports are linking their current challenges to the ongoing nearly five-month long labor negotiations. Last week the Port of Long Beach reported an accelerated rate of volume declines and now the Port of Los Angeles announced similar monthly results while East Coast ports are bucking the trend showing continued monthly gains.

“There are three factors contributing to the current volumes,” said Gene Seroka, Port of Los Angeles Executive Director, during his monthly briefing. “The biggest is a cargo shift to East and Gulf Coast ports due to protracted labor negotiations.” Also, while not directly linking the second factor to the labor negotiations, Seroka highlighted that cargo shippers advanced shipments creating the peak season in June and July, well ahead of the normal holiday imports cycle. Many analysts have speculated that the earlier volumes were also an attempt to avoid potential port delays.

The result was that the Port of Los Angeles experienced its lowest volume for the month of October since 2009. The volume was not only down by a quarter versus last year, but was also 22 percent below the five-year average for October.

The total volume was 678,429 TEU. The largest decline was in imports which fell 28 percent to 336,307 TEU. Exports however were also down 8.5 percent to just over 89,722 TEU. As would be expected, the level of empties also declined by a quarter reflecting the lower import levels. October volumes at the Port of Los Angeles were also off more than four percent versus September and the third consecutive month of declines in total volume after a record July.

The Port of Long Beach similarly reported a 16 percent decline in its volumes for October. It was the second month of volume declines reported by Long Beach and the first significant year-over-year drop in volumes.

Operationally the Port of Los Angeles however highlights that the slowing pace has helped it to catch up from the challenges experienced primarily in 2021 and early 2022. Seroka noted that dwell times have improved and the vessel backlog is nearly gone. Contributing to the clearing of the backlog, Seroka said carriers blanked 20 sailings in October, which represented as much as a quarter of normal service. He said the Port of Los Angeles’ terminals are now operating at approximately 70 percent of capacity as a result. 

While saying “we have to get that cargo to come back,” Seroka also acknowledged changing consumer spending patterns. He said after peak buying of consumer durables like furniture and appliances, the cycle has slowed which impacts imports. Consumers he acknowledged are also concerned about inflation, interest rates, and concerns about a recession.

Addressing the future outlook, Seroka confirmed that carriers have already canceled another 20 sailings between November and December. Despite the port’s total volume still being up six percent over 2021’s record, he admitted that they now expect November and December to be soft continuing the trend that emerged in recent months.