The busiest U.S. ocean container gateway could soon be handling $1 trillion worth of imports in a single quarter amid a roaring economy and resilient consumer spending.
Record volume of 954,706 TEUs in September, up 27% y/y, helped drive all-time high volume of 2,854,904 million TEUs in the third quarter, according to data released today by the Port of Los Angeles.
Imports totaled 497,803 TEUs in September, ahead 26% as shippers got an earlier-than-usual start bringing in end-of-year holiday merchandise.
A front-loaded peak season came as retailers sought to avoid a host of issues threatening to snarl the global supply chain, from congestion in Asia ports to attacks on shipping in the Red Sea to a brief strike by union longshore workers at East and Gulf Coast ports.
Import value was $990 billion in the quarter compared to $955 billion a year ago. “We’re looking at a trillion dollars in imports before long,” said Port Executive Director Gene Seroka in a video call with reporters.
Seroka said that since the pandemic holiday retail sales have gotten a boost as consumers seek a sense of normalcy.
“Halloween is a bigger holiday season than ever before, it’s a part of the social fabric of consumers,” he said.
At the same time, Seroka acknowledged that deflation of .05-1% on an array of retail goods has also helped spur consumer spending.
“Census data shows that retail sales have grown for 52 consecutive months. Retail sales are up 3.5% so far from a year ago, and that’s very robust when Gross Domestic Product is 2.5-3%. Wages are growing, housing is still relatively better off, and unemployment is low by historic standards.”
Container volume from July-September was 27% higher y/y at better than 939,000 TEUs for each of the three months. The port handled an average of 13 container vessels per day in September, up 35% from September 2023.
Year to date through September, volume was 7,586,395 TEUs, up 1.2 million TEUs or 18% y/y, and 5% ahead of the previous five-year average.
In November the port will look to ramp up container traffic with a truck reservation system, to leverage what Seroka said is the gateway’s 50% latent truck capacity.
“That means we can double our throughput,” he said.
Rail dwell time, the period containers sit on the docks until they are loaded on a train leaving the port, have been elevated for some. That can lead to delays to goods moving through the supply chain to warehouses, distribution centers and other destinations.
While BNSF Railway (NYSE:BNI) set an all-time mark in September with approximately 500,000 container lifts, up 41% y/y, Seroka said rail boxes are sitting twice as long as they should, about eight days, and that the port has been in daily discussions about the issue with BNSF and Union Pacific (NYSE:UNP). Currently there are 20,000 boxes sitting on the port’s docks awaiting loading on trains for nine or more days. But that has had no dramatic impact on operations at the port, where there are a total 50,000 containers dockside as of Oct. 18.
Loaded exports in the quarter totaled 351,333 TEUs, a decline of 5% from 2023 as the port saw two slight monthly decreases since July. Empty units totaled 995,120 units, up 45% and the most since the pandemic.
Seroka expects October volume in the mid-800,000-TEU range, well above 2023 and 2022.
“There is no evidence of a drop in the traditional slack season,” said Seroka. “There’s an early Lunar New Year in 2025 [in China} and while we’re weeks away from the presidential election, tariffs may spur early cargo as shippers look to avoid those extra costs. Then there’s the strength of the economy, and jobs and retail sales are up.”
Following a three-day strike at East Coast ports, there is uncertainty as the International Longshoremen’s Association (ILA) and East Coast port employers negotiate a new contract under an extension of the current pact that runs through January 15. Seroka said he hasn’t seen any vessel diversions or cargo allocations to the West Coast.
The port has benefitted from the five-year West Coast union contract negotiated in 2023 between the Pacific Maritime Association and the International Longshoremen’s and Warehouse Association.
“That’s part of the stability factor,” Seroka said. “For the U.S. economy to continue to grow, all ports need to be moving at top speed. So lets get to a deal, everybody moving in the same direction.”
Find more articles by Stuart Chirls here.
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