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Containership berthed at the Port of Los Angeles

Photo courtesy Port of Los Angeles

US West Coast Ports See Minimal Red Sea Cargo Rerouting

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February 14, 2024

By Lisa Baertlein

LOS ANGELES, Feb 14 (Reuters) – West Coast ports are seeing minimal impact from militant attacks and drought that are forcing merchant vessels to find alternatives to the Suez and Panama Canal trade shortcuts, a top U.S. port official said on Wednesday.

Those diversions drove a slight uptick in volume at the busiest U.S. container port in Los Angeles. “It is not a deluge of freight,” Port of Los Angeles Executive Director Gene Seroka said on a media call.

Maersk and other major container ship operators are avoiding drone and missile attacks in the Red Sea by sending cargo bound for Europe and the East Coast of the United States around the southern tip of Africa, rather than through the Suez Canal. 

Europe is heavily exposed to what has become the largest ocean shipping upheaval since the early days of the COVID-19 pandemic – with supermarkets bracing for a shortage of tea in Britain and IKEA warning of potential shipping delays.

While the impact on the United States is limited, some U.S. importers are shifting Asia cargo to the direct Pacific Ocean route and ports on the West Coast.

Should that pattern intensify, Seroka said, Los Angeles “has the capacity to handle additional cargo.” 

U.S. container import volumes jumped 9.9% in January from the year earlier, according to data from Descartes Datamyne. Imports from China hit the highest level in two years as an uptick in shipments of goods such as chemicals, electrical components and furniture more than offset declines in consumer electronic and apparel. 

Retailers like Walmart, Amazon and Home Depot dominate global ocean container shipping. The industry’s January sales nearly matched those of the December holiday shopping season, stoking demand. 

Seroka attributed the Port of Los Angeles’ nearly 19% gain in January imports to inventory restocking and the rush to bring in goods before Chinese factories closed to celebrate the Lunar New Year holiday starting on Feb. 10. 

Los Angeles and other major West Coast ports lost market share to East Coast rivals during 2023 longshore labor talks affecting ports on the Pacific Coast. They’re now clawing business back as importers seek to avoid any disruptions related to this year’s labor talks at ports on the East Coast and Gulf of Mexico. 

The top five West Coast ports handled 43% of U.S. import volume in January, a more than 3% increase from December. Volume fell almost 3% at top East Coast and Gulf of Mexico ports, putting their share at just over 42%, according to Descartes.

(Reporting by Lisa Baertlein in Los Angeles; editing by Jonathan Oatis)

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