POLA-POLB see annual volume gains in November

The two largest ports in the United States—the Port of Los Angeles (POLA) and the Port of Long Beach (POLB)—both reported volume gains for the month of November.

POLB imports, which are primarily comprised of consumer goods, at 296,638 TEU (Twenty-foot Equivalent Units), were up 6.5 percent annually and represent the highest level for November imports over the last five years. While imports in November were up annually, they were at the lowest level since July and were below October, which is typically the busiest month of the year, at 298,271 TEU

POLB exports, which are primarily comprised of raw materials, increased 9.9 percent annually to 151,950 TEU and stand as POLB’s third highest export level in 2013 behind March and August. 

Total November POLB volumes were up 2.5 percent at 569,599 TEU, with empties down 12.7 percent at 121,011 TEU. POLB officials said with imports outpacing exports, most empties are sent overseas to be refilled with goods, and in most months the total of exports plus empties is nearly equal to imports. In November, POLB said when exports spiked, empties headed downward.

On a year-to-date basis through November, imports are up 14.4 percent at 3,163,889 TEU, and exports are up 10.8 percent at 1,556,782 TEU and empties are up 8.6 percent at 1,427,459 TEU. Total TEU through November are up 12.1 percent at 6,148,130 TEU.

Total November volumes at the Port of Los Angeles rose 17.3 percent to 683,849 TEU. Imports headed up 18.7 percent to 342,247 TEU and were behind October’s 346,137 TEU. Exports increased 23.3 percent to 179,175 TEU.

POLA officials said the annual increases for imports and exports in November are due largely to larger vessels calling at POLA in conjunction with the U.S. economy improving, too.
POLA has previously seen declines in volumes in the form of losing some market share to POLB due to a new service line between ocean carriers MSC and CMA CGM that moved from POLA to neighboring POLB having commenced earlier this year, with both carriers having established hubs at POLB, with vessels calling on POLB. MSC is sharing a POLB hub with COSCO and MSC is in a terminal sharing arrangement with Hanjin at POLB.

Empties rose 8.7 percent to 162,426 TEU. And total TEU through November at 7,215,223 is down 3.66 percent.

Key Bank analyst Todd Fowler wrote in a research note that the stronger annual trends at these ports partially reflect easier comparisons related to work stoppages at the ports last November.

“That said, trends still exceeded our expectations with imports reaching their highest November level since 2007,” Fowler noted.  “While potentially reflecting some pull forward ahead of an earlier Lunar New Year in 2014, we believe November volumes highlight gradually improving macro conditions and provide an initial read into potential restocking activity for early 2014, though partially balanced by indications of a mixed retail environment.”

This line of thought was echoed by Ben Hackett, founder of maritime consultancy Hackett Associates, who believes the U.S. economy could see better results in 2014.

Hackett noted that the U.S. economy appears to have found a growth spurt on a sustainable trend should the recent third quarter GDP estimate of 3.6 percent is a
reliable indicator, which follows a 2.5 percent increase in the second quarter.

“For a mature economy, those are quite high growth rates,” Hackett told LM. “We are well on our way to a sustained recovery. And with unemployment now down to 7 percent, it is also a positive sign for economic recovery.”

But despite the GDP gains, Hackett said there lies a caveat in that consumer spending remains cautious and “does not come anywhere near the expansion of GDP,” mainly because inventory levels are increasing. He noted that even with back-to-school sales, Black Friday, Cyber Monday, and regular sales, the inventory-to-sales ratio is still too high, but said that increased consumer spending in November and December might help to reduce those inventory levels.