POLA and POLB April volumes remain down but show some signs of improvement

While seeing some signs of improvement, despite the ongoing COVID-19 pandemic, April volumes at the Port of Los Angeles (POLA) and Port of Long Beach (POLB) were still down annually.

Total April POLA volume—at 688,999 TEU (Twenty-Foot Equivalent Units)—saw a 6.45% annual decline, which marks a considerable improvement over March’s 30.9% annual decline. This also marked a 53% sequential improvement, from March to April.

POLA imports—at 370,111 TEU—rose 2.6% annually, with exports—at 130,121 TEU—down 16,2%. Empty containers—at 188,567 TEU—were off 14.4%. On a year-to-date basis through April, total POLA volume—at 2,488,748—are down 15.5% compared to the same period a year ago.

“Given the unique circumstances of a trade war and pandemic, April volumes are better than expected,” said POLA Executive Director Gene Seroka in a statement.. “As we move deeper into the remainder of the second quarter, we’re forecasting significantly lower volumes, particularly on the import side. There are at least 28 voided vessel sailings. Retailer orders are soft as consumer purchasing and confidence has dropped precipitously.”

Total April POLB volume—at 519,730 TEU—was off 17.3% annually compared to POLB’s busiest April on record. Imports—at 235,540 TEU—were down 20.2%, and exports—at 102,502 TEU—decreased 17.2%. Empty containers—at 163,688 TEU—were off 12.2%.

Over the first four months of 2020, total POLB volume—at 2,202,650 TEU—are down 9.5% annually.

“We look forward to a recovery stage and rebounding cargo shipments as the nation contemplates relaxing shelter-in-place orders, people return to work and consumer demand rises –  however it will not be in the short term,” said Mario Cordero, Executive Director of the Port of Long Beach, in a statement. “In the meantime, we continue to collaborate with importers, exporters, terminal operators and labor to develop a recovery plan while ensuring the safe and reliable delivery of goods moving through the Port of Long Beach.”

POLB officials highlighted various factors impacting volumes, including:

• decreased consumer demand during stay-at-home health orders prompted by COVID-19 drove down imports coming into the Port of Long Beach. Exports were hampered by a shift of carrier services;
• manufacturing in China is rebounding from the COVID-19 pandemic; however, demand in the United States is below normal due to the ongoing crisis;
• while the Port of Long Beach had only one canceled sailing in April, the San Pedro Bay port complex is expected to have 48 canceled vessel voyages April 1 through June 30 – 16 of which are scheduled for the Port of Long Beach. The two ports reported 10 blank sailings during the same period in 2019, following 61 canceled sailings for the San Pedro Bay ports during the first quarter of 2020 caused by a manufacturing slowdown during the height of the COVID-19 crisis in China, nearly double from 31 blank sailings a year earlier

The April POLA and POLB data is consistent with data issued in the latest edition of the Port Tracker report issued by the National Retail Federation (NRF) and maritime consultancy Hackett Associates.

The report pegged April to be down 13.4%, to 1.51 million TEU, with May, at 1.47 million TEU, expected to be off 20.4% compared to May 2019. June and July, at 1.46 million TEU and 1.58 million TEU, are expected to fall 18.6% and 19.3%, respectively. And August and September, at 1.73 million TEU and 1.7 million TEU, are estimated to be down 12% and 9.3%, respectively.

Port Tracker stated that prior to the COVID-19 pandemic, imports from February through May were expected to come in at 6.9 million TEU, but have since been reduced by 14.9%, to 5.87 million TEU. And it added that the first half of 2020 is expected to hit 9.15 million TEU, which would mark a 13% annual decline, down from an initial estimate of 10.47 million TEU.

Hackett Associates Founder Ben Hackett was far from sanguine in his assessment of the report’s data.

“There are few signs of optimism in the shadow of COVID-19,” he wrote. “The International Monetary Fund is projecting a recession of Great Depression levels, with trade declining by 34 percent and unemployment in the United States reaching 15 percent. Most other forecasts are not that pessimistic, but we should nonetheless look at all of them with a pinch of salt. No one has dealt with a ‘viral’ depression before and most projections are being driven by the short-term results of the dramatic lockdown of national economies rather than soundly based on economic fundamentals.”

And he went on to note that much will depend on consumers’ willingness to return to spending, assuming that businesses can be opened quickly enough to soak up the huge levels of unemployed individuals.

“Our view is that second-quarter economic growth will be significantly worse than the previous quarter, but we continue to expect recovery to come in the second half of the year, especially the fourth quarter and into 2021,” he wrote. “This is based on the big and somewhat tenuous assumption that there is no second wave of the virus. Our expectation is that U.S. imports of containerized goods in 2020 will be down by around 10 percent. This is much the same as we had in our April forecast.”