Southern California's Ports Experience Continuing Rebound in Volumes

Southern California’s ports are continuing to report a strong rebound in container traffic as shippers and businesses seek to recover from the sharp downturns experienced in April and May during the lockdowns associated with the pandemic. The ports, however, remain cautious because of the unpredictable future outlook.

For the second month in a row, the Port of Long Beach, California is reporting a record month for total volume through the port. Total container volume was up more than nine percent in August to 725,610 TEUs. This comes after a record July during which Long Beach saw a more than 21 percent increase in year-over-year volumes.

Driving the strong performance in August was a 13 percent increase in the import volume reflecting the beginning of the peak shipping season as retailers increase stock leading into the traditionally busy retail selling season. Exports at the port remained basically stable increasing just one percent in August. This is a reversal from July when exports reported the strongest growth. Another positive indicator was that the traffic in empty containers was up more than eight percent in August. 

“Despite the recent surge in cargo, uncertainty remains in international trade and the national economy, given the ongoing COVID-19 impacts,” said Mario Cordero, Executive Director of the Port of Long Beach. “August marked another great month for the Port, but we must remain vigilant about the global pandemic’s lasting effects.”

According to the port, the boost comes at the start of the peak shipping season, which typically runs from August to October as retailers prepare for the upcoming holiday shopping season. Among the goods in demand moving through the port in August were home improvement items and home exercise equipment.

Long Beach also reported that it is also continuing to see a short-term increase in extra vessel visits that made up for voyages that were canceled earlier this year. The strong volumes in August also helped the port to recover lost volumes from earlier in the year. Whereas total volume was down nearly three percent year to date at the end of July, the port has now reduced that so that total volume is down just over one percent for the first eight months of 2020.

The recovery is also continuing at the neighboring Port of Los Angeles. Speaking on Wednesday to Marketwatch, Los Angeles’ executive director Gene Seroka also highlighted that the Los Angeles has gone from the low volumes earlier in the year to near-record levels of imports. He reported that August volumes at Los Angeles we near records and predicted September looked very strong as well.

While analysts agreed that retailers and industry are seeking to restock supplies, some also cautioned that it might be a temporary surge. The shipping association BIMCO in its recently released analysis of the container shipping business speculated that “ships are again frontloading their goods, this time ahead of a potential second wave of coronavirus around the world and resulting lockdowns.” BIMCO highlighted declines in total retail sales as well as concerns that government efforts to scale back stimulus measures could contribute to higher unemployment and lower consumer income.