Sluggish export volumes from Los Angeles port highlight US-China trade imbalance

Houston — The Port of Los Angeles struggled to grow containerized exports amid a tense trade environment with China even as imports reached a one-year high in July, the port's executive director said on Aug. 13.

Total import volumes at the port in July were 457,196 twenty-foot equivalent units, or TEUs, down by 6.2% from July 2019, which was also the seasonal high monthly volume for last year. More than 97% of imported containers were loaded with goods.

But loaded export volumes from Los Angeles fell by 22% year on year to 126,354 TEUs in July, highlighting a trade imbalance with China that has been growing rapidly during the coronavirus pandemic. More than 60% of total TEU exports from the port were empty containers being repositioned in Asia.

"The bottom line is: July numbers were encouraging, but exports must pick up," Port of Los Angeles Executive Director Gene Seroka said in a videoconference briefing on Aug. 13. "There is a natural imbalance between imports and exports, but some of these swings in imports and exports have been self-inflicted by American trade policy."

Export volumes from the port have underperformed on a year-on-year basis in 20 out of the past 21 months through July, Seroka said.

"There needs to be an all-out American push to grow our exports, connecting our farmers with overseas buyers," Seroka said, adding that export volumes from Los Angeles would likely grow in August and September before dropping again in October as China celebrates its Golden Week holiday.

Platts Container Rate 13 -- North Asia to West Coast North America –- rose to $3,150/FEU (forty-foot equivalent unit) on Aug. 3, the highest level in at least three years as shippers from China paid escalating premiums for space on container ships.

Container ship owners took a large chunk of capacity out of rotation as the coronavirus outbreak began, while exporters from North Asia told S&P Global Platts that many of their cargoes were being deferred to later voyages unless they agreed to such premiums.

But shipowners have also begun to expand capacity again to meet contract requirements, bringing Platts Container Rate 13 lower to $3,100/FEU on Aug. 13.