Container Volumes Fall at Most US Ports

A combination of the Lunar New Year, ongoing labor negotiations and concern about a slowing global economy resulted in the Port of Los Angeles seeing a 43% year-over-year drop in container cargo in February.

The port processed 487,846 20-foot-equivalent containers, down from last year’s 857,764.

“February declines were exacerbated by an overall slowdown in global trade, extended Lunar New Year holiday closures in Asia, overstocked warehouses and a shift away from West Coast ports,” Port of Los Angeles Executive Director Gene Seroka said. “While we expect more cargo moving across our docks in March, volume will likely remain lighter than average in the first half of 2023.

Labor Tensions Rise in Stalled West Coast Port Contract Talks 

Tensions in long-running contract talks at West Coast ports are worsening, with employers accusing unionized dockworkers of slowing cargo handling at the ports of Los Angeles and Long Beach, the nation’s busiest gateway for imported consumer goods.

The sharp rhetoric marks a shift from a longstanding agreement to maintain public silence on issues around the negotiations, which began last spring. The two sides appear to be no closer to bridging the gap on their disagreements, pointing to the possibility of deeper disruptions to U.S. trade flows.

The Pacific Maritime Association, which represents ocean carriers and port employers, said Monday that dockworkers at the ports of Los Angeles and Long Beach had stopped staggering work shifts during mealtimes starting last Wednesday.

National diesel average falls 6.2 cents, to $4.185, reports EIA

The national average price per gallon of diesel gasoline saw another decline, for the week of March 20, according to data issued this week by the Department of Energy’s Energy Information Administration (EIA).

The national average decreased 6.2 cents, to $4.185, following a 3.5-cent decline, to $4.247, for the week of March 13. This was preceded by a 1.2-cent decrease, to $4.282, for the week of March 6, an 8.2-cent decline, to $4.294, for the week of February 27 and another 8.2-cent decrease, to $4.376, for the week of February 20, and a 9.5-cent decrease to, $4.444 per gallon, for the week of February 13. Those declines were preceded by a 1.8-cent increase, to $4.622 per gallon, for the week of January 30 and an 8.0-cent increase, to $4.604, for the week of January 23, with a 2.5-cent decline, to $4.524, for the week of January 16.

Despite big gains in New York, Los Angeles remained top port in 2022

For a brief moment last year, the Port of New York and New Jersey made waves with a single stat: It had become the largest port in the United States, dethroning the long-standing volume leader, the Port of Los Angeles.

Though the East Coast port only kept the top spot for a few months — falling back to the #2 spot by December — its gains over the years made it the second-largest port in the nation, outpacing the Port of Long Beach in 2022. The Port of New York and New Jersey has been gaining market share since the pandemic, growing its volumes by more than 2 million TEUs in the past five years.

Gains at the top of the ranking reflect a broader trend of rising volumes for U.S. ports. See a full ranking of U.S. containerports that handled more than a million TEUs in 2022 below.

For February, Carloads, Intermodal Volume Decline

U.S rail traffic in February 2023 lagged the same month last year—down 5.2% or 101,452 carloads and intermodal units, the Association of American Railroads (AAR) reported March 1. This follows January’s 3.2% drop from the prior-year period; while carloads rose slightly during the first month of the year, intermodal experienced its worst January since 2013.

According to AAR, U.S. Class I railroads in February 2023 hauled 1,849,723 carloads and intermodal units, comprising 905,744 carloads (down 1.6%) and 943,979 containers and trailers (down 8.4%). In contrast, February 2022 U.S. rail traffic experienced big year-over-year gains largely due to severe winter storms holding back volumes in 2021; February 2019 U.S. rail traffic was behind February 2018, reflecting weather and/or economic and trade-related uncertainty.

DAT’s January Truckload Volume Index is solid to start 2023

The January edition of the DAT Truckload Volume Index (TVI), which was recently issued by DAT Freight & Analytics kicked off 2023 in strong fashion.

The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during that month, with the actual index number normalized each month to accommodate any new data sources without distortion, with a baseline of 100 equal to the number of loads moved in January 2015. It measures dry van, refrigerated (reefer), and flatbed trucks moved by truckload carriers.

January’s van freight TVI—at 223—was up 2.8% compared to December and also up 2.8% annually. The refrigerated TVI—at 174—was up 3.0% compared to December and up 3.6% annually. And the flatbed TVI—at 218—was up 10.7% compared to December and was up 12.4% annually.

New ‘five-year plan’ to revive China as a modern logistics giant

Increased demand has exposed cracks in China’s logistics infrastructure, but it’s hoping its new ‘five-year plan’ for the sector may be enough to stop an expected exodus of western multinationals.

The General Office of the State Council last month announced its first long-term plan for modernising China’s logistics system, with a focus on improving efficiency resilience and safety.

Although it is a five-year plan, according to state news agency Xinhua: “By 2025, a modern logistics system featuring supply/demand adaptation with internal and external connectivity will basically be in place.

South Korea’s First Smart, Electric Ship Begins Service

Hyundai Heavy Industries recently commissioned South Korea’s first large next-generation electric propulsion ship which incorporates smart technology. The unique vessel is dual-powered with the ability to operate either fully from its battery or an LNG-fueled engine or a hybrid mode with the battery supplementing the engines. The vessel will operate as a demonstration ship and undertake tourist voyages from the city of Ulsan along the Korean coast.

Construction on the 1,400 gross ton vessel began in October 2021 at the Hyundai Mipo Shipyard. Named Ulsan Taehwa, the vessel features an electric propulsion system developed by Korean Shipbuilding & Marine Engineering that includes an energy storage system that enables selective operation of the DC Grid-based LNG and marine diesel oil power plant.

U.S. Container Imports Tumbled Close to Prepandemic Levels in December

U.S. ocean imports closed 2022 extending a monthslong slide closer to prepandemic levels, according to a new report, leaving the shipping sector bracing for deeper declines in container volumes this year.

American ports handled 1,929,032 inbound containers in December, measured in 20-foot equivalent units, or TEUs, down 1.3% from November, according to a report released Tuesday by Descartes Datamyne, a trade intelligence database owned by supply-chain software company Descartes Systems Group Inc. December marked the lowest level for seaborne imports since June 2020, just before a pandemic-driven rush to restock depleted inventories triggered a surge in imports.

Ports on Both Coasts See Drop-Off in Volume in November

Port container volumes on the West Coast and East Coast declined in November, although shippers were focused on different factors.

Labor talks between the 22,000-member International Longshore and Warehouse Union and Pacific Maritime Association, which represents 29 port and storage locations, continued to weigh on volumes. On the East Coast, cargo levels were driven by concerns over the economy.

However, in the past six months, East Coast ports have seen a significant uptick in container handling, even with the slightly lower November number.

Top disruptions that shook supply chains in 2022

Geopolitical conflicts, strike threats and weather-related disasters tested supply chains in 2022, adding new headaches for businesses still grappling with the fallout from the pandemic.

Russia’s invasion of Ukraine led to tight supply and high prices for certain commodities, forcing some companies to overhaul operations and rethink their sourcing strategies. Meanwhile, COVID-19 lockdowns in China sent businesses scrambling for alternatives as some suppliers idled production.

New York continues streak as nation’s No. 1 port as LA cargo volume hits level not seen since 2009

The Port of New York and New Jersey took the top spot in the country for trade in the month of October, the third-consecutive month it has topped California’s big ports as more cargo volume shifts to the East Coast in what seems with every month to look more like a permanent shift.

New York handled 792,548 twenty-foot equivalent units (TEUs), nearly 19% more than in October 2019.

Earlier this week, the Port of Los Angeles posted its lowest level of October since 2009. Port of Los Angeles executive director Gene Seroka cited protracted negotiations and fears of a labor strike among port workers as the reason for the shift in trade at a press conference earlier this week.

Third Railroad Workers Union Turns Down Pact

The possibility of a nationwide freight railroad strike is increasing after another union turned down a tentative agreement that was negotiated in mid-September among the major Class I carriers, a management council and the Biden administration.

The International Brotherhood of Boilermakers voted down the agreement, according to the union and the railroads. The precise vote was not made available.

While the union is the smallest of the bargaining units with only about 300 workers who repair and rebuild diesel locomotives, if any union votes to go on strike and picket lines are set up, it is expected the more than 115,000 workers, including locomotive engineers and conductors, would honor the strike.

Imports Into Southern California’s Ports Plunged 26% in October

Imports into the nation’s busiest container port complex in Southern California are plummeting as U.S. trade sputters and retailers and manufacturers shift their supply chains amid increasingly contentious West Coast port labor negotiations.

The neighboring ports of Los Angeles and Long Beach handled 630,231 loaded inbound containers in October, down 26% from the same month a year ago and the lowest volume of goods coming into the ports since May 2020.

Gene Seroka, the executive director of the Port of Los Angeles, said Tuesday that the biggest factor in the cargo declines, which began in August, is that importers are moving more of their goods to East Coast and Gulf Coast ports “due to protracted labor negotiations.”

US imports from China falling faster than from other countries

America and China remain intimately intertwined via trade despite worsening tensions over Taiwan and the Russia-Ukraine war. More than a third of all U.S. containerized imports arrive from China. More than a sixth of China’s export value derives from U.S. purchases.

But there are growing signs of at least some decoupling. In recent months, America’s imports from China have fallen faster than total imports. Other Asian countries are increasingly taking U.S. market share from China, a trend that began before the pandemic and has continued.

According to new data from Descartes, U.S. containerized imports in October were flat (up 0.2%) versus September. But imports from China fell 5.5% month on month, by 45,071 twenty-foot equivalent units. The decline from China was entirely offset by gains from Thailand, South Korea, Taiwan, Japan and other countries.