Ports of Los Angeles and Long Beach post strong June volumes but tariff concerns remain intact

June volumes at the Port of Los Angeles (POLA) and the Port of Long Beach (POLB) were both solid in advance of the upcoming Peak Season.

POLB handled 752,188 (TEU) Twenty-Foot Equivalent Units in June, which stands as the busiest volume month in its history and marks a 14.2% annual improvement. The previous best month was July 2017, which June 2018 surpassed by 4.4%.

POLB June imports rose 14.5% to 384,095 TEU, with exports up 14.3% at 135,168 TEU. Empty TEU headed up 13.6% to 232,926.

On a year-to-date basis, POLB volumes are up 4.5% annually to 3,952,931 TEU. Imports and exports are up 13.3% and 14.2%, respectively, at 1,992,252 TEU and 813,215 TEU. Empties are up 16.9% to 1,147,463 TEU. Port officials noted that June finished up the best second quarter in its history at 2.1 million TEUs, which is a 10% annual gain, topping the prior high from the second quarter of 2006.

“We are on track to beat our historic pace from 2017,” said Port of Long Beach Executive Director Mario Cordero in a statement. “The domestic and global economies are good, which is why we’re seeing all of this activity. Certainly the escalating trade tensions have everyone in the industry concerned, but we’re going to continue to provide excellent customer service and fulfill our mission of facilitating commerce.”

And Harbor Commission President Lou Anne Bynum added that she is pleased to see cargo moving efficiently, even as record volumes continue.  

“With the Port getting ready to enter the peak season and retailers replenishing their stocks for the holidays, it’s great to see these volumes and the smooth flow of goods,” said Bynum.

POLA handled 723,141 TEU in June, which was down 1.1% annually. But even with the decline, POLA officials said that this marks the second fiscal year period in which the port has topped the 9.1 million TEU mark, with 24 months of “record-breaking cargo movement.”

June imports were up 2.9% annually to 382,964 TEU, and exports were up 1.4% to 147,563 TEU. Empty containers were down 9.7% to 192,613 TEU. Through the first six months of 2018, POLA volumes are down 3.87% annually to 4,309,135 TEU.

“We closed our fiscal year on June 30th with 9,169,779 million TEUs,” said Port of Los Angeles Executive Director Gene Seroka in a statement. “The consistently high container throughput over the past 24 months speaks to our unmatched capabilities, and we are grateful to our terminals, labor force and supply chain partners for their efforts that made this milestone possible. Looking forward, a continued shuffling of alliance services in the San Pedro Bay, coupled with potential impacts from recently imposed tariffs, provide a level of uncertainty and potentially softened trade flows through our port during the second half of 2018.”

Looking ahead to the second half of 2018, including Peak Season, looks to be interesting, said POLA Media Relations Manager Phillip Sanfield.

“On one hand, the economy has been robust and imports have been strong, not only in San Pedro Bay but around the country,” he said. “On the other hand, we have got these tariffs that are in different stages…either looming or some already imposed or retaliatory ones being considered. That provides a level of uncertainty. The global supply chain thrives on certainty. We are cautious about the second half. It really depends on how these tariffs take hold. Gene Seroka has said that in looking at the numbers to date we are estimating at least 15% of port cargo volumes would be exposed to the tariffs that are either in place or are part of the $200 billion that are being discussed in the weeks ahead along with the retaliatory measures. When we say ‘exposed,’ that does not mean they would go away…it means those products going through our docks would be tariffed both for inbound and outbound containers. How that affects cargo, whether retailers or consumers back off and slow orders, or if tariffs are passed along, remains to be seen and is a concern.”

Sanfield said POLA has been stressing that half of U.S. imports go to U.S. manufacturers to be processed, so it does not represent all finished products. And he added that POLA would like to see negotiations at the highest levels to commence immediately with all nations impacted by tariff actions involved.

“We believe negotiation is the best pathway to resolving these issues, and we want a fair and level playing field for U.S. businesses competing in the global economy and want to see negotiations commence to resolve these issues,” he said. “The longer it goes on, the more uncertainty it creates in the marketplace.”