POLB and POLA see further volume declines in March

By Jeff Berman, Group News Editor · April 8, 2020

March volumes at the Port of Los Angeles (POLA) and the Port of Long Beach (POLB) continued to decline, due to the ongoing impact of the coronavirus, or COVID-19, pandemic, according to data respectively issued by the ports this week.

Total March POLA volume—at 449,568 TEU (Twenty-Foot Equivalent Units)—saw a 30.9% annual decline. Imports—at 220,255 TEU—fell 25.9%, and exports—at 121,146 TEU—dipped 23.8%. Empty containers saw a 44.5% decrease to 108,168 TEU.

For the entire first quarter, total POLA volume was down 18.5%—at 1,799,749 TEU—compared to the first quarter of 2019, with port officials noting that March’s tally is the single lowest volume month going back to February 2009. They added that POLA officials are in regular contact with terminal operators, longshore unions, and other supply chain stakeholders to make sure that stakeholders are able to obtain the necessary supplies they need for a safe and clean work environment.

“We’ve had two serious shocks to our supply chain system,” said Gene Seroka, Executive Director of the Port of Los Angeles, in a statement. “First the trade war between the U.S. and China and now the COVID-19 pandemic. With U.S. retailers and cargo owners scaling back orders, volumes are soft even though factories in China are beginning to produce more. Amidst this public health crisis, there will be uncertain months ahead in the global supply chain.”

Total March POLB volume—at 517,663—slipped 6.4% annually. Imports—at 234,570 TEU—dropped 5%, and exports—at 145,442 TEU—were off 10.7%. Empty containers—at 137,652 TEU—saw a 21% annual decline.

“The coronavirus is delivering a shock to the supply chain that continues to ripple across the national economy,” said Mario Cordero, Executive Director of the Port of Long Beach, in a statement. “We’re definitely seeing a reduction in the flow of cargo at San Pedro Bay, but the ports remain open and operating, and we are maintaining business continuity.”

Total POLB first quarter volume—at 1,682,920 TEU—is down 6.9% annually, with imports down 9.2%, to 793,123 TEU, exports up 7.2%, to 379,624, and empties down 11.9%, to 510,173 TEU.

POLB officials said that overseas health concerns over the coronavirus caused 19 canceled sailings to the Port of Long Beach during the quarter.

In the Port Tracker report, which was issued this week by the National Retail Federation (NRF) and maritime consultancy Hackett Associates, NRF Vice President for Supply Chain and Customs Policy Jonathan Gold that even with factories in China getting back online, there still remains fewer U.S.-bound imports than were initially expected.

“Many stores are closed, and consumer demand has been impacted with millions of Americans out of work,” said Gold. “However, there are still many essential items that are badly needed and because of store closures cargo may sit longer than usual and cause other supply chain impacts.”

In the previous edition of the Port Tracker report, Gold said there are various unknowns to fully determine the impact of the coronavirus on the supply chain, adding that even as factories in China continue to come back online, with products now flowing again, there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. And he also noted that retailers are working with both their suppliers and transportation providers to find paths forward to minimize disruption.”

Global trade intelligence firm Panjiva recently said it expected further declines in March, which came to fruition. The firm cited a recent ISM survey showing import expectations at a ten-year low, coupled with what it called the expectations of COVID-19 disruptions outside of China.

“There is always going to be a drop, but by how much is always the question,” he said. “A lot of [cargo] arrives into the U.S. in February, just before the Lunar New Year. The West Coast port numbers will be bad, and the East Coast numbers will be down, too, but not as bad,” said Panjiva Research Director Chris Rogers. “March will show the full extent of it, and we will have a full Q1 comparison to see where things actually ended up.”

In terms of the impact of the coronavirus on U.S. import levels, Rogers said it is likely consumers will only spend on essential items and cut back on spending in general, which will reduce demand for various consumer products, too. Items that may see declines, he cited, included durable consumer goods, apparel, and furniture, among others.

And Todd Fowler, KeyBanc Capital Markets analyst, wrote in a research note that POLA and POLB container import volumes exhibited notable weakness in March, though the magnitude of decline moderated from February as Chinese manufacturing began to come back online (Feb -20%, March -16%).

“On a full-quarter basis, import volumes declined 13% in 1Q20,” he wrote. “Looking ahead, we expect some sequential recovery in volumes as Chinese production more fully resumes, as well as some inventory replenishment following a recent drawdown in inventories. That said, we expect volumes to remain below prior-year levels as business shutdowns and stay-at-home orders more fully materialize, as well as indications of retailers scaling back orders and an expected reduction in economic activity. On a full-year basis, we forecast import volumes to decline low single digits but note considerable uncertainty with forward visibility.”

April 8, 2020