West Coast Port Terminal To Close Monday As Disruptions Persist
By Alicia Diaz and Laura Curtis Jun 4, 2023 (Bloomberg) –At least one terminal at the Port of Long Beach will be shut on Monday, seeming to extend disruptions that have...
U.S. container ports experienced the largest contraction of inbound containers ever in the final months of 2022 as a slowdown in global trade continues to hammer ports volumes.
In his latest monthly U.S. ports report, industry veteran John McCown reports that inbound containers to the ten largest U.S. ports dropped 16.5% year over year in December, only slightly below November’s record 16.7% decline. December now marks six straight months of year over year declines for inbound container volumes.
Once again, East and Gulf Coast ports outperformed West Coast ports, las month experiencing a 19.1% decline in inbound container volumes for only a slight improvement from November’s 26% drop.
December marked West Coast ports’ fifth straight month of double digit percentage declines as cargo volumes continue to shift east over fears of possible labor unrest on the West Coast. For comparison, East and Gulf Coast ports saw only a 14.2% volume decline in December—marking the second straight monthly drop after consecutive monthly gains throughout much of the pandemic.
McCown’s report highlighted the “striking coastal difference” that has been building between West and East/Gulf Coast ports. Inbound volumes at East and Gulf Coast ports in December came in at 10.2% below the 30-month average since June 2020, when year over year gains returned following early impacts of the COVID-19 pandemic. West Coast ports, on the other, came in 27.1% below that same benchmark in December.
“December was the nineteenth straight month where the year over year percentage change in volume at East/Gulf Coast ports outperformed West Coast ports,” McCown states in his report.
In fact, East and Gulf Coast ports have generally outperformed West Coast ports in terms of growth rates for the last six years amid a generally steady eastward shift of inbound cargo volumes that picked up steam with the expansion of the Panama Canal in late 2016, and now exacerbated this year by congestion delays and more recently over concern of possible labor unrest as dockworkers negotiate a new labor contract with West Coast port employers. According to McCown, this shift east is likely to continue.
“The underlying cost economics of water versus land modes and population dynamics favor a continuation of a subtle but inevitable further transition of containers eastward,” McCown writes.
As the dust continues to settle from the pandemic’s roller coast effect on containerized imports, McCown points out that at some point the monthly volume figures will return to being a pulse of overall economic activity. With a lot of uncertainty heading into 2023, we may not be at that point yet.
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