Despite sluggish March volumes, Q1 volumes for POLA and POLB impress

First quarter volumes at the Port of Los Angeles (POLA) and the Port of Long Beach (POLB) were both very strong based on data issued respectively by the ports this week.

POLA and POLB are the two largest North American ports, and they collectively account for more than 40 percent of U.S. imports. As previously reported, West coast port volumes, especially in first half of 2015, had been uneven, as ports had to work through the backlog caused by the nine-month West Coast port labor dispute between the PMA and ILWU, which reached a resolution in the form of a new contract agreement that was reached in the spring of 2015.

Total March POLA volume at 612,863 TEU fell 22.6 percent compared to March 2015, when volumes saw significant gains following labor-related congestion issues. Imports dropped 33.3 percent to 287,231 TEU (Twenty-Foot Equivalent Units), and exports headed up 9.5 percent to159,362 TEU. Empty containers fell 22.8 percent to 166,269 TEU.

Even though March POLA volumes fell, total first quarter volumes set a new port record at 2,030,982 TEU for an 11.3 percent annual gain. First quarter imports and exports came in at 1,055,433 TEU and 975,549 TEU, respectively.

“Our first quarter growth is significant and encouraging,” said Port of Los Angeles Executive Director Gene Seroka in a statement. “The feedback we are receiving from cargo owners and exporters is that the Port is delivering on speed, efficiency, cost and service. Our terminal operators and supply chain partners are working with us to continuously improve and optimize operations.”

POLA said that the two largest container vessels currently calling North America, the CMA CGM Benjamin Franklin and the Maersk Edmonton, are scheduled to return to the Port of Los Angeles concurrently next week as POLA continues to successfully handle megaships and move larger container volumes per ship call.

POLA Media Relations Director Philip Sanfield told LM POLA is cautiously optimistic about the remainder of the year.

It’s too early to say how the traditional heavier months of July/August Sept will be at this time,” he said. “We should have a better indication after the second quarter. There are a lot of supply chain variables in the equation.”

Port of Long Beach March volumes saw a 26.2 percent decline at 464,855 TEU. Imports were down 34.6 percent at 207,635 TEU, and exports were flat at 127,210 TEU. Empty containers dropped 29.8 percent to 130,010 TEU.

POLB officials explained that March’s output was impacted by the difficult annual comparisons, as March 2015 was up 32 percent annually, due to the strong recovery in volume from labor-related cargo backlogs earlier in 2015. They also cited the Lunar New Year in Asia, which typically curtails freight flows as many factories in East Asia are closed during this time for up to two weeks.

POLA first quarter volume was up 6.1 percent for its best quarter going back to 2007 and was due mainly to solid volumes in January and February. Imports for the quarter were up 6.3 percent at 781,996 TEU and exports were up 6.1 percent at 356,959 TEU.

“Overall, we are pleased with these results,” said Port of Long Beach CEO Jon Slangerup in a statement. “The uneven global economy, industry financial pressures, weak U.S. export demand and the introduction of megasized container vessels to West Coast ports have created dynamic conditions for the maritime industry that will continue to play out over the coming year. Nevertheless, our value proposition, being the fastest and most cost-effective supply route from Asia to America’s consumer markets, continues to define Long Beach and Southern California as the multimodal gateway of choice for our shipping customers.”

Addressing the March declines at both ports, Deutsche Bank Analyst Rob Salmon observed in research note that these declines came off an abnormally strong February as both months were impacted by the timing of Chinese New Year.

“We would not be surprised if retailers are starting to drawdown inventories as we have remained cautious about elevated stockpiles,” he wrote.