Import Growth Slows at U.S. West Coast Container Ports
More supply chain routes appear to have shifted to ports on the East Coast
The neighboring ports of Los Angeles and Long Beach, Calif., which handle the largest volume of container cargo among U.S. ports, reported a total of 749,645 loaded inbound 20-foot equivalent units, or TEUs, a standard measure for container cargo, last month. That was a 2.5% increase over the same period last year, pulling back after year-over-year surges of 26% and 12% in March and April.
“These May numbers are anything but encouraging,” said Jock O’Connell, an international trade economist.
Meanwhile, two of the largest port authorities on the East Coast—Virginia and Georgia—saw their import volumes grow last month by 8.8% and 13.5% from the same month a year ago.
The slowing import growth on the West Coast comes as those ports, which handle most of the U.S. cargo trade with Asia, are seeing big changes to their daily operations driven by shake-ups and consolidation among global ocean carriers. Beginning in April, new ocean carrier alliance agreements went into effect, meaning the vast majority of cargo on major routes is now carried by one of three entities rather than the four that had previously dominated the sector.
Those three alliances are increasingly sending containers on larger ships to the U.S. West Coast but making fewer port calls. “The awkward May numbers for the California ports may be a late echo of the alliance realignment,“ Mr. O’Connell said, ”especially if the shipping lines are continuing to transition to larger vessels calling less frequently.”
At the same time, the shipping lines are sending bigger vessels from Asia to the U.S. East Coast through an expanded Panama Canal to get more goods closer to population centers along the Atlantic seaboard.
According to ocean shipping consultancy Drewry, the number of container ships capable of carrying 13,000 TEUs or more—known as “megaships”—on routes between Asia and the U.S. West Coast has doubled since the beginning of the year.
Larger ships remain in port longer and unload more cargo, which can create bottlenecks on the land side. Some agricultural producers in the U.S. have said delays related to megaship logistics can add time to their export shipments, causing problems with their customers abroad and potentially damaging their products.
May export volume was down in Los Angeles and Long Beach compared with the same period last year. Dockworkers handled 288,425 loaded export TEUs at the Southern California ports in May, a decline of 4.2% from May of 2016.
For the year so far, imports and exports have increased through the Southern California ports, and both the ports of Los Angeles and Long Beach said 2017 was their busiest May on record.
Write to Erica E. Phillips at erica.phillips@wsj.com
