In a significant turnaround, West Coast ports are experiencing a resurgence in container volumes, signaling a robust period for the freight forwarding and logistics industry. The Port of Los Angeles and the Port of Long Beach, two of America’s largest Pacific gateways, have reported substantial increases in cargo throughput, indicating a shift in the transpacific trade landscape.
A Record-Breaking September
The Port of Long Beach achieved its busiest September on record, with an 11.8% increase from the previous year, handling 829,429 twenty-foot equivalent units (TEUs). This surge surpasses the previous record set in 2020, during the height of the COVID-induced e-commerce boom. The Port of Los Angeles also saw a significant uptick, processing 748,400 TEUs, marking a 5.4% year-over-year increase.
Consumer Confidence Fuels Growth
The rise in container volumes could be attributed to growing consumer confidence and demand for holiday-related goods. The ratification of the International Longshore and Warehouse Union (ILWU) contract has also played a pivotal role in stabilizing labor relations and enhancing the ports’ operational efficiency. This positive development has reassured shippers and contributed to the ports’ ability to handle increased volumes effectively.
Exports and Imports Dynamics
While imports have shown robust growth, with the Port of Los Angeles reporting a 14% year-over-year increase, exports have presented a mixed picture. The Port of Long Beach experienced a decline in exports by 10.3%, yet the Port of Los Angeles saw a remarkable 55% increase in exports, signaling a potential narrowing of the trade gap, which bodes well for the U.S. economy at large.
Spot Rate and Volume Trends
The shift in cargo flows is also reflected in spot rate trends. Trans-Pacific spot rates to the West Coast have remained more resilient compared to those to the East Coast, suggesting a stronger volume flow to the West Coast. This is further corroborated by the Freightos Baltic Daily Index and the Drewry World Container Index, which show a significant retention of peak-season rate increases for West Coast routes.
Looking Ahead
The ports are gearing up for a sustained increase in container volumes through the fourth quarter. The Port of Los Angeles anticipates a strong comeback, with full-year throughput expected to be down only 13% year-over-year, a remarkable recovery from the 32% decline in the first quarter. The Port of Long Beach also expects a moderate rebound in cargo volume through the end of the year.