Strong Start for SoCal Ports with Positive Outlook for Market Share Gains

 

The Southern California ports at Los Angeles and Long Beach both reported a strong start to 2024 highlighting the belief the ports are recovering from the downturns in the economy last year and shippers rerouting due to fears of labor disruptions during the longshore workers' contract negotiations. Executives at both ports expect continued strength in imports moving into the year while however highlighting that the ports still have capacity for near-term growth.

The Port of Los Angeles called January 2024 a “great start” with what it termed “impressive” results both for its import and export volumes. January 2024, they said, was the port’s second-best January on record, falling short only of January 2022 which was during the peak surge in volumes in the pandemic. Unlike 2022, when container vessels were stacked up outside the port, they also highlight an orderly flow with the Marine Exchange of Southern California which manages vessels in the San Pedro Bay area repeatedly reporting no congestion or labor delays.

Executives at both the ports of Los Angeles and Long Beach highlighted a strong and early restocking effort as helping to drive import volumes. Cargo owners are actively replenishing said the Port of Los Angeles while the Port of Long Beach said that retailers stocked their warehouses in January ahead of the typical slowdown around the Lunar New Year holiday. Los Angeles also pointed to the strength of the U.S. economy and anticipated consumer demand which they believe will continue to fuel growth in volumes.

Asked about the impact that the diversions from the Red Sea and the reduction in transits at the Panama Canal, Los Angeles’ Executive Director Gene Seroka however denied the reports that these issues were driving the strong volume growth. He said they had so far only seen a small uptick from shippers but said “it could change.”

The Port of Los Angeles reported its sixth consecutive month of year-over-year gains in total volume with an 18 percent overall increase versus January 2023. Imports were up 19 percent to nearly 442,000 TEU and exports increased 23 percent to more than 126,000 TEU.

”It was the eighth consecutive month of year-over-year gains in exports,” said Seroka. He called the performance a “welcome rebound after more than two years of very low export volumes.”

Long Beach reported a decline in exports however by 18 percent, but an overall gain in volume of 17.5 percent. Imports increased 23.5 percent to more than 325,000 TEUs.

“We are ready to grow our volumes and hope to see continued growth through 2024 as we gradually recapture market share,” said Port of Long Beach CEO Mario Cordero. Neighboring Los Angeles shared a similar view while noting the port’s terminals are currently operating at 75 to 80 percent of capacity. Seroka highlighted that the SoCal ports have increased their Asian market share by four percent since the longshore workers' contract was ratified in August 2023.

Despite expecting a slowdown in volumes in late February and into March reflecting the Lunar New Year Holiday which is underway in Asia this week, Los Angeles is forecasting a strong first quarter. Seroka told reporters during his monthly briefing that he expects “robust volume in February,” forecasting more than 700,000 TEU. For the first calendar quarter of 2024, the Port of Los Angeles forecasts an overall gain of 20 percent in volume or a total of more than 2.2 million TEU.