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Import glut drives Port of Los Angeles container volume to record quarter

Highlights

Q3 volumes climb to more than 2.7 million TEUs

Holiday restocking to continue through October before easing

New York — Container throughput at the Port of Los Angeles hit an all-time high in the third quarter and showed few signs of slowing as year-end holiday restocking fueled a sustained surge in imports.

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The port handled 2.7 million twenty-foot equivalent units from July through September, up by 5.9% from the same quarter a year ago, according to data released Oct. 14. Total volume for the third quarter, which is also typically the peak season for container shipping, was also a 38% increase over the pandemic-hit Q2.

Container shipping activity has gone from strength to strength as shipowners moved past playing catch-up on cargoes delayed by cancelled sailings earlier in the year. The market is now being driven by the traditional September to October restocking window ahead of the holiday shopping season as well as a more fundamental shift in consumer spending toward imported goods.

"This amount of cargo volume creates supply chain complexities. Surging imports have caused dwell times to increase, with longer turnaround times for trucks," Port of Los Angeles Executive Director Gene Seroka said.

As trans-Pacific shipping lines were pushed to capacity, Platts Container Rate 13 — North Asia to West Coast North America — tripled from March and was last assessed at $3,750/FEU.

Los Angeles is the busiest container port in the US and an important gateway for Asian imports. The port had 14 container ships at berth Oct. 14, but for the past several months has been deploying a reduced workforce to load and unload the ships to maintain social-distancing protocols.

Major retailers like Walmart and Home Improvement fueled much of the surge as they remained open while other shops around the country were closed, Seroka said. Imports of athletic wear and electronics have also surged as more people adapt to a working-from-home environment.

At the same time, loaded export volumes from the Port of Los Angeles fell on a year-on-year basis for 22 of the last 23 months. More than half of the 1.25 million boxes exported from Los Angeles port in Q3 were empty containers being repositioned in Asia to bring in more imports.

"Exports are down because of the lack of a national trade policy," Seroka said. "We have to look for a better balance in trade."

The US trade deficit ballooned to the highest level in 14 years at $67.1 billion in August, according to the US Department of Commerce.

Despite the surge in Q3 imports, total volume at the Port of Los Angeles in 2020 is expected to be the lowest in four years at about 8.9 million TEUs, down 5% from last year in the wake of dozens of cancelled sailings earlier this year, particularly in the March through May period as the coronavirus outbreak became a global pandemic.

Total throughput at the port in September was 884,625 TEUs, up by 13.3% year on year but a drop of 8% from the record monthly volume in August. The port is expected to process around 950,000 TEUs in October and more than 800,000 TEUs in November, Seroka said.