August volumes are strong for Ports of Los Angeles and Long Beach

Following July, which saw mixed results, August volumes at the Port of Los Angeles (POLA) and the Port of Long Beach (POLB) were on the same page, with the two largest North American ports, which collectively account for more than 40 percent of U.S. imports, posting annual gains.

As previously reported, West coast port volumes, especially in first half of the year, had been uneven, as ports had to work through the backlog caused by the nine-month West Coast port labor dispute between the Pacific Maritime Association and the International Longshore & Warehouse Union, which reached a resolution in the form of a new contract agreement that was reached earlier this year.

Total POLA August volumes saw a 3.8 percent annual gain at 786,677 TEU (Twenty-Foot Equivalent Units), which also outpaced July’s 699,127 TEU. This marks the port’s best August since the 790,726 TEU recorded in 2006.

POLA imports, which are primarily comprised of consumer goods, increased 6.3 percent to 383,551 TEU, with exports off 14 percent at 143,936 TEU. Empties saw a 14 percent gain at 234,927 TEU.

Through the first eight months of 2015, total POLA volumes are down 2.5 percent at 5,389,316 TEU.

“The numbers are strong indicators that our terminal operators, longshore labor and supply chain partners are adjusting to the new industry dynamics of carrier alliances, deploying larger ships and delivering higher container volumes per call,” said Port of Los Angeles Executive Director Gene Seroka in a statement. “Our San Pedro Bay supply chain optimization working groups, overseen by the Federal Maritime Commission, are providing valuable insights that contribute to our mission to improve cargo-flow efficiency and velocity.”

And POLA Director of Media Relations Philip Sanfield told LM that August’s numbers are among the top five for the month in the port’s history.

He explained that this output is reflective of that face that cargo owners are coming back to Los Angeles, with the port unmatched in speed to market, costs, infrastructure, labor (when it is fully operational like it has been since late February), and the handling of bigger ships.

“A lot of ports say they are big ship-ready. We are more than that: we are big ship-active,” he said. “We have had three 13,000 TEU ships at the dock simultaneously unloading here. We noticed in our numbers that for August 2014 there were 136 ship calls with 757,000 TEU, and this August there were 110 ship calls with 786,000 TEU, with 26 fewer ships calls and 30,000 more TEU, which is a reflection of that continue to call here and will continue to and continue to get bigger. We are pleased and it is an encouraging sign going forward.”

Port of Long Beach August volumes set a new record for the second straight month, with 703,652 TEU for a 22.8 percent annual increase, coming off of 690,244 TEU in July. POLB officials said that the cumulative 1,393,896 TEU in July in August serves as a “clear sign” that strong customer confidence in the port is intact.

August imports rose 19.1 percent annually to 358,262 TEU, and exports were up 9.4 percent at 138,765 TEU. Empties saw a 42.1 percent hike to 206,625 TEU. On a year-to-date-basis through August total POLB volumes are up 5.4 percent at 4,700,314 TEU.

POLB officials cited various reasons for the best month in port history, including growing consumer confidence, a strong dollar, retail inventory growth, and the port’s strategic partnerships that are showing positive results. POLB CEO John Slangerup said that the port has made $4 billion in improvements in tandem with economic growth, adding that this volume “is the clearest sign that consumers are buying.”

In describing the POLA and POLB August volumes in a research note, KeyBanc Capital Markets Analyst Todd Fowler wrote that the stronger than expected volumes are seen as an incremental positive for freight activity in the coming months.

“That said, a portion of the strength is likely attributable to some share returning from Eastern and Gulf ports, as well as a strengthening dollar supporting imports,” he noted. “Looking ahead, comparisons become increasingly difficult in September and restocking activity may be softer following somewhat elevated inventory levels.”