Port of Los Angeles still tops in North America

Patrick Burnson, Executive Editor -- Logistics Management, 1/30/2008

LOS ANGELES—Despite a series of controversial new fees and tariffs imposed on shippers last year, the Port of Los Angeles continues to lead the nation. The port handled 8.4 million TEUs (twenty-foot equivalent units), a 1.36 percent dip in total TEU volume but a 3.2 percent increase in loaded TEUs volume over the 2006 calendar year. 

Maritime analysts suggest that declining inbound figures, though, may signal a long-term shift in vessel deployments.

“We see more cargo being moved all-water to the U.S. East Coast,” said Jon Monroe, president of Monroe Consulting in Shanghai. “That is taking share away from LA/Long Beach. We also believe that shippers will be looking at gateways on the West Coast as alternatives. Prince Rupert is coming on strong, and Seattle and Tacoma are very aggressive in competing with Southern California for cargo destined for distribution centers in the Midwest.”

Port of Los Angeles executive director, Geraldine Knatz, admitted in a statement that other challenges made 2007 a tough year.

“On the heels of a 13-percent volume gain in 2006, our volumes started off strong last January and February, but declined from there, and we are not anticipating overall gains in 2008 due to the weak economy and the shipping industry’s focus on increasing Asia-Europe capacity,” she said.

Still, containerized export cargo continued to grow at a record pace in 2007, with a 13 percent increase of loaded outbound containers (184,023 TEUs) and an 11.4 percent decrease in empty containers, or 300,821 fewer containers. 

This, said analysts, is due in part to China’s huge appetite for low-value raw materials. Since 2000, containerized exports have risen 63 percent.  Besides waste paper and scrap metal, the port’s export trade includes cotton, animal feed, resins, and aircraft and automotive parts.

“With soft consumer spending and the weak U.S. dollar, our 2007 results were on par for the most part with west coast and national volumes, a reminder that ports are a reflection of the economic climate,” added Knatz.  “One example is the housing slump, which correlates into a decline in consumer demand for furniture, which is our largest containerized cargo import.”

In the Trans Pacific trade, shipping lines incurred heavy losses during 2007 due to steep increases in fuel costs over the past 24 months and no fuel surcharge ability to offset those costs.  In the coming years, it’s expected that the shipping lines will continue to invest in the more lucrative Asia-Europe trade, deploying larger ships and more services to support trade between Asia and Europe, the world’s largest consumer market.

Annual container volumes at the Port of Los Angeles have varied since 2000, but the overall average growth has been 10.6 percent since 2000, and forecasted growth figures for the San Pedro Bay Ports is based on a 6-percent average gain year over year.