January 18, 2024–The Southern California ports of Los Angeles and Long Beach are back on top, enjoying a resurgence of cargo as the new year gets underway, with each gateway projecting throughput figures for January that show substantial improvements over last year’s numbers.
“For the 24th consecutive year, the Port of Los Angeles ranks as the nation’s number one container port,” said Port Executive Director Gene Seroka at the annual state of the port address on January 10.
“Bringing back cargo and the related jobs is our big priority,” Seroka said. “That’s why we’re pleased to see a 3% bump in our West Coast market share compared to East and Gulf Coast ports.”
A DRAMATIC RECOVERY
Seroka said the port returned to “positive container flow” in the second half of 2023 with “five straight months” of year-on-year growth, while acknowledging that the total for the year was down 13% compared to 2022.
But he said the current figure still represents “a dramatic recovery” from the decrease in throughput of more than 30% the port experienced after the first quarter of 2023.
He also insisted that the “real story” was in the port’s exports, which had the highest volume since the year 2020 and were up more than 7% year over year.
“Working together with our partners at the Port of Long Beach, we’ve made San Pedro Bay the country’s biggest gateway, now nearly double the size of the next largest port complex in the country,” he said, adding that “we want to see our container numbers continue to grow.”
VOLUMES UP IN LONG BEACH
That view was endorsed in Long Beach where Port Executive Director Mario Cordero was no less ecstatic at the progress made by the two ports in recovering cargo flows that had been diverted to the East and Gulf coasts during labor negotiations in 2021 and 2022.
“All is good on the West Coast, and particularly here at the Port of Long Beach,” Cordero said in an interview with Bloomberg TV on January 10. “We are in normalization,” he said, explaining that projections put the port in line with figures achieved in 2019, if not slightly higher.
The Port of Long Beach, like the Port of Los Angeles, actually began to see growth resume in the latter part of 2023: “our December 2023 TEU number was 37% above the December 2022 number.”
“So, I think we’re on a good pace now,” Cordero said.
OPPORTUNITIES OUT OF SUEZ
That pace may begin to increase due to problems in the Red Sea and the Panama Canal which could see greater numbers of containers coming to the U.S. West Coast as shippers seek to redirect their cargoes away from supply chain disruptions in those areas of the world.
“I think in time, if this continues, that is, in terms of what we’re seeing in the Red Sea, you are going to see some numbers here increasing here at the Port of Long Beach and the West Coast,” said Cordero, citing it as “definitely an option for shippers.”
Seroka likewise sees problems in the Red Sea as an opportunity for the San Pedro Bay gateways: “Now we’ve got a real opportunity to look at pushing cargo away from the Suez and back to the West Coast.”
PANAMA ‘DYNAMIC’ ADDS NUMBERS
While the Red Sea diversions have yet to register much increased traffic for the two ports, the story is different regarding the problems for ships attempting to traverse the Panama Canal.
“For the Southern California ports here, particularly Port of Long Beach, we’re seeing some numbers from Panama, that is, numbers of carriers that would’ve gone through the canal and now are opting out to come to the West Coast,” said Cordero.
He explained that on average, 40-plus carriers traverse the Panama Canal on a daily basis—a number that has been halved due to restrictions imposed on the waterway by the drought conditions in the region.
Cordero expects that “the Panama Dynamic” is going to continue for quite some time due to the drought conditions, a situation that likely means more cargo being diverted toward the twin ports of the San Pedro Bay.
THE PORTS ARE READY
The Port of Long Beach “can handle” the increased traffic, having learned valuable lessons from the congestion problems wrought by the Covid-19 pandemic, Cordero said.
“We’ve stepped back, and lessons have been learned since we had the backlog, and we’re more prepared to go to 24/7 operations if we need to than we have been in the past,” Cordero told the Los Angeles Times. “We are very fluid. We are doing well, and we can handle more.”
Seroka agreed, telling the paper that the Port of Los Angeles is running at 75% of capacity and is at pre-Covid levels.
“So not only do we have capacity to grow, but we’ve also got the bottlenecks and the backlogs worked out of the system,” he said. “We took what we learned from the Covid surge and tried to apply it day in and day out.”
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