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Ports of LA and Long Beach Report Steep Volume Drop Due to COVID-19

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Image courtesy Port of Long Beach

By The Maritime Executive 03-12-2020 06:57:50

The impact of the coronavirus slowdown in China is now arriving at U.S. West Coast seaports, particularly at the Los Angeles-Long Beach San Pedro Bay complex. 

On Tuesday, Long Beach reported an 18 percent year-on-year drop in container import volume for the month of February. Overall, TEU volume was down by 10 percent. The port cited two factors: the lingering effects of the U.S.-China trade war and elevated tariffs on Chinese goods; and the disruption caused by the novel coronavirus. 

“With the extended factory closures and slowdown of goods movement in China and other Asian countries in February due to Lunar New Year and COVID-19, we are seeing shipping lines needing to cancel some sailings,” said Port of Long Beach executive director Mario Cordero in a statement. “Once the virus is contained, we may see a surge of cargo, and our terminals, labor and supply chain will be ready to handle it.”

The city of Long Beach is also addressing its own first cases of COVID-19, with four individuals testing positive for the disease so far. The city is taking measures to reduce spread, including limited reductions in school events and programming. 

At the neighboring port of Los Angeles, total February TEU volumes fell by nearly 23 percent compared with last year. Import volumes fell by 22.5 percent, driven down by the impact of coronavirus in China. 

“We are more interconnected than ever with our global partners so it’s no surprise that transpacific maritime trade has been significantly impacted," said Port of Los Angeles Executive Director Gene Seroka. “As factory production in China remains at low levels, we expect soft volumes in March. Looking ahead to anticipated manufacturing improvements, we will need to return empty containers to Asia and push lingering U.S. export boxes out swiftly. We’re actively working with our supply chain partners to be prepared for a cargo surge once production levels ramp up.”

At Port of LA, longshore hiring is down sharply, and 145 truckers have been laid off or furloughed due to low volume. But a turnaround may be around the bend: operations are returning to normal in China, where the epidemic has substantially been brought under control. Hubei province, the epicenter of the outbreak, registered just eight new infections on Thursday, and only 15 were recorded nationwide. "Broadly speaking, the peak of the epidemic has passed for China," said Mi Feng, a spokesman for the National Health Commission, speaking to Reuters. 

At Chinese seaports, ocean carriers ONE and CMA CGM report that cargo operations are essentially back to normal, and it is expected that the resumption of port productivity in China will eventually translate into more activity at the major U.S. container seaports. “Right now, they’re telling us [the turning point] will be May-June, but that’s all predicated on reports that some [Chinese] factory workers are being returned to work,”said International Longshore and Warehouse Union president Ray Familathe, speaking to the Daily Breeze.