By Mike Wackett (The Loadstar) –
There are “bright skies ahead” at the port of Los Angeles, according to its executive director, Gene Seroka, given the improving economic outlook.
However, he said, for the port to take advantage of a rebound in demand, it was “crucial” a deal was reached on the long outstanding west coast labour agreement, highlighted by the pause in cargo operations at terminals at Easter.
The number of import containers arriving at the port in March increased 28%, month on month, as carriers pared-back their blank sailings to 18 – from the 30 cancelled in February.
Imports handled at LA terminals last month totalled 319,962 teu, some 35% below the record set the previous year, while exports declined 12%, to 98,276 teu. There was also a huge 42% drop in the repositioning of empty containers back to Asia, to 204,996 teu, as depots in China remain overstocked.
In total, 623,234 teu passed across the LA terminals last month, down 35% on the same month of 2022, and for Q1 the total processed amounted to 1,837,094 teu, which was 32% lower than the previous year’s “best quarter in the port’s history”.
“Economic conditions slowed global trade considerably in the first quarter, however, we are beginning to see some signs of improvement, including nine consecutive months of inflation declines,” said Mr Seroka.
“Despite the current headwinds, we are forecasting volume growth from one month to the next…our preliminary data tells us that April volumes will land at nearly 700,000 teu, which will be another significant month-over-month gain.”
Indeed, according to the port’s Signal data platform, this week will see the arrival of 23 vessels, discharging 116,796 teu, which is 63% higher than last week and 37% above the number of import boxes in the same month of last year.
And anecdotal reports to The Loadstar this week suggest space on sailings from China to the US west coast “is becoming tight”, with other reports of containers being rolled.
Meanwhile, forwarding agent contacts have told The Loadstar they expect transpacific carriers will succeed with at least part of their 15 April and 1 May $500-$1,000 per 40ft GRIs, which will encourage further announcements in the coming weeks.
Moreover, the signs that the market is tightening will encourage BCOs to finally commit to negotiating on stalled annual contracts. Nevertheless, with container spot rates having fallen by 80%-90% in the past year, the contract values will be significantly lower.
OOCL’s Q1 operational numbers this week revealed that the carrier’s average rate on the transpacific had slumped from Q1 22’s $3,964 per teu to $1,457 per teu, despite its revenue during the period being boosted by some unexpired higher contract rates.
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