As elevated consumer demand continues to be a rallying cry, of sorts, as it relates to the heavy ongoing United States-bound import surge, volumes at the Port of Los Angeles (POLA) and the Port of Long Beach (POLB) continued to set new records in October.
POLA said it handled 980,729 Twenty-Foot Equivalent Units (TEU), which represented a 27.3% annual increase, for its highest-volume month in its 114 years of operations, while highlighting both inventory replenishment and retailers getting ready for the holidays.
Imports—at 506,613 TEU—headed up 28.99% annually, with exports up 2.6%, to 143,936 TEU. Empty containers—at 330,179 TEU—rose 39.3%. Through the first 10 months of 2020, total volume is off 5.3%, to 7,444,463 TEU.
POLA Executive Director Gene Seroka said on a recent media call that over the last several months, there has been what he called a historic surge of cargo volume placing unprecedented stress of every aspect of the logistics industry, from manufacturing facilities to store shelves and everywhere in between.
“The outbreak of the COVID-19 pandemic earlier this year led to a plummet in cargo volumes, as much of the global economy ground to a halt,” he said. “However, all of that has changed since factories restarted in China and other Asian locations and the severe backlog of cargo that sat idle in warehouses began to move over the past several months, driven by strong growth in consumer buying along with other omnichannel distribution networks. Since the summer, we have moved to the other end of the spectrum, when it comes to trade volume. We are now experiencing a surge in imports, as businesses make up for lost time and race to restock shelves and warehouses ahead of the holiday shopping period. China, in particular is fueling this wave after months of economic lockdown. It is a recipe for cargo arriving at our shores and straining our goods movement infrastructure.”
POLB’s data showed that the port handled 806,603 TEU in October, for a 17.2% annual increase and setting a new monthly record for the third time in 2020, topping the 795,580 TEU in September and the recorded 753,081 TEU, which was set in July. What’s more, this October tally marked the first time total POLB monthly volume topped the 800,000 TEU mark.
October POLB imports rose 19.4% annually, to 402,408 TEU, and exports slipped 12.9%, to 114,679 TEU. Empty container saw a 31.8% annual gain, to 289,517 TEU. On a year-to-date basis through October, total POLB volume, at 6,513,908 TEU, is up 2.3% annually.
“The peak holiday shipping season is supporting our ongoing recovery and record highs, but we are now facing a new wave of COVID-19 cases spreading across the country and remain locked in a trade dispute with China,” said Mario Cordero, Executive Director of the Port of Long Beach, in a statement. “We are optimistic about the gradual economic recovery while bracing for any shocks still to come.”
In a recent interview with LM, Cordero said that total first half POLB volume was off 6.9% annually, prior to the third quarter, which saw a major volume turnaround, with rapidly rising import levels.
“As you are going into the second half of the year, we had a 21% annual volume gain in July, so we started to see a turnaround,” he said. “There are a few factors related to that. Number one, when you back to the pandemic, its epicenter was China. Factories there were shut down for the first quarter of the year. And then over the second half of the year factories in China began to ramp back up to 100%. What that means is we began to see a replenishment of the warehouses, with that cargo that was delayed was now going to be sent over. While we did expect a surge, with the expectation that the factories would be back online at some point, it was beyond what we thought. The second factor was the ongoing demand for PPE. And, at this point, we were very dependent on Asia, there was a big priority, and rightfully so, for expediting PPE, which was a major driver in the cargo increase. POLB worked very well with our healthcare partners in that business to expedite and prioritize PPE-related cargo at the port. We put them “in front of the line,” so to speak.
Another factor he cited was e-commerce, which he called a very interesting development, as e-commerce is something POLB has talked about for years.
“We saw that some of the retailers, for example, like Target, were already transitioning to [more] e-commerce before the pandemic, in terms of improving efficiencies,” he said. “And consumer spending has continued throughout the pandemic, which is a big factor, not only for the national economy but also for international trade. In the U.S., our GDP is very dependent on consumer spending, and because of e-commerce it has facilitated the continued purchasing by the American consumer. Rather than physically go to a large retail setting, they instead now go and buy online, and I think that has been a salvation not only for the economy but for us at the port. I do have concerns, though, even though we are doing very well, that the expectations made by those who forecast that this e-commerce surge will continue into February 2021. The question is: what happens after that? That is all dependent on the pandemic and how well we have that under control at some point, and, of course, the economy. People continue to be losing their jobs, even though there is some light at the end of the tunnel. What is saving us right now is the usual peak we have for holiday shopping. But we are concerned what happens after February, in terms of where the economy is going, and, of course, how that could impact consumer demand.”
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman