Container ports on both the east and west coasts are reporting record import volumes as retailers import goods for the looming peak holiday season in a volatile environment of trade wars and tariff threats.
The Port of Los Angeles said today it had moved 828,662 twenty-foot equivalent units (TEUs) in May, the busiest May in its 112-year history and a rise of 7.8 percent compared to last May. The previous strongest May volume at the Port occurred in 2017 with 796,217 TEUs.
"I'm extremely pleased with another record month of throughput," Port of Los Angeles Executive Director Gene Seroka said in a release. "As we prepare for our traditional peak shipping season in the months ahead, we're closely monitoring global trade tensions that have created heightened unpredictability."
May 2019 imports increased 5.5 percent to 427,789 TEUs compared to last May. Exports decreased 0.8 percent to 167,357 TEUs. Empty containers increased 20 percent to 233,515 TEUs.
The Port of Los Angeles moved 828,662 TEUs in May (busiest May in the Port's history) and volumes reflect growth of 7.8% compared to last May. For the first five months of 2019, #PortofLA volumes have increased 5.2% compared to the same period last year. https://t.co/IQ69v1MIKx pic.twitter.com/6HYzhNj3w6— Port of Los Angeles (@PortofLA) June 11, 2019
Business was also good back east, where the Port of Virginia processed nearly 261,000 TEUs, making it the busiest May in the port's history. The month's strong cargo volumes were a follow-up to the best April in the port's history, when nearly 246,000 TEUs were processed, officials said Friday.
"We are on our way to another volume record for fiscal year 2019 and closely monitoring the trade environment for any effects that additional tariffs may have on our business as we go forward," Virginia Port Authority CEO and executive director John F. Reinhart said in a release. "These unforeseen changes are always of concern, but we are very optimistic about the long-term success of The Port of Virginia. To help ensure sustainability in the near- and long-term, we are working to diversify our cargo mix and this strategy will serve as a hedge during challenging trade environments."
The facility is handling its record cargo volumes as a result of expanded container handling capacity at its two primary container terminals, Virginia International Gateway (VIG) and Norfolk International Terminals, including increased rail capacity.
"Both of the East's Class I railroads, (CSX and Norfolk Southern) provide double stack service to and from VIG. Combine that service with the investment we've made in our rail operation and we are well-positioned to capture more rail cargo," Reinhart said. "Our rail reach into the Midwest is expanding and we are aggressively marketing our capabilities. It is realistic to expect that we will be moving 40 percent of our overall cargo volume by rail by 2022."
That high volume trend is expected to continue through the summer as the nation's container ports see red-hot demand from retailers that are stocking up inventory to get ahead of higher tariffs, according to the monthly "Global Port Tracker" report released today by the National Retail Federation (NRF) and consulting firm Hackett Associates.
"With a major tariff increase already announced and the possibility that tariffs could be imposed on nearly all goods and inputs from China, retailers are continuing to stock up while they can to protect their customers as much as possible against the price increases that will follow," NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a release. "Tariffs are taxes paid by American businesses and consumers, not foreign governments. Retailers will continue to do everything they possibly can to mitigate the impact of tariffs on consumers, but if we see further escalation in the trade war, it will be much more difficult to avoid higher price tags on a wide range of products."
U.S. ports covered by Global Port Tracker handled 1.75 million TEUs in April, the latest month for which after-the-fact numbers are available. That was up 8.4 percent from March and up 6.9 percent year-over-year. May was estimated at 1.88 million TEU, up 3 percent year-over-year. June is forecast at 1.86 million TEU, up 0.3 percent; July at 1.93 million TEU, up 1.1 percent; August at 1.95 million TEU, up 3.3 percent; September at 1.89 million, up 0.9 percent, and October at 1.95 million TEU, down 4.4 percent.
Ports covered by Global Port Tracker include the ports of Los Angeles/Long Beach, Oakland, Seattle, and Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston, Savannah, Port Everglades, Miami, and Jacksonville on the East Coast, and Houston on the Gulf Coast.