The cargo surge that exploded in the last several months of 2020 at the Ports of Los Angeles and Long Beach has continued into the new year, including the latter setting a January record — but the the spike in imports has also caused massive congestion and sent some ships to smaller ports.
Port of Los Angeles Executive Director Gene Seroka, in a virtual news conference on Wednesday, Feb. 17, said cargo numbers there were up by 3.6% in January compared to the same month a year ago, just before the coronavirus pandemic hit. It was the sixth consecutive month the port had a year-over-year increase, the nation’s largest trade hub said in a press release later Wednesday.
The Port of Long Beach, meanwhile, had a nearly 22% jump — marking its busiest January on record.
The current surge, driven by imports, came after cargo plummeted in the first half of 2020 because of the pandemic — and, both ports said, that surge will likely continue in the months ahead.
“All indications point toward a strong flow of imports over the next few months,” Seroka said in that release, “as consumers continue an unprecedented buying surge which began last summer.”
The surge, though, has largely been driven by imports coming from Asia.
Last month, for example, the Los Angeles port saw about 5.5% more imports compared to January 2020, according to port data. Exports, meanwhile, were down nearly 19.5%. And, as a result, empty containers heading back to Asia increased about 14.5%.
While Long Beach also saw imports increase last month — by 17.5% compared to January 2020, that port said in early February — it did not see the same decline in exports. Instead, exports out of Long Beach climbed 7%, the port said. Empty containers heading overseas, however, outpaced Long Beach’s increase in exports, growing by 34.6%.
And, Seroka said, U.S. exports overall have been down in 25 of the last 27 months.
That imbalance, driven partly by the pandemic and partly by the trade war that began under the previous presidential administration, has caused issues for both ports.
“What we’re experiencing is one-way trade,” Seroka said, “which has created challenges for the entire supply chain.”
Both Los Angeles and Long Beach currently have a backlog of ships either in port or at anchor waiting to pull in, for example.
The L.A. Port saw 87 cargo vessels arrive last month, according to its press release. And anchor wait times have climbed up to about eight days.
On Wednesday, the LA and Los Angeles ports complex tied a record — set the day before — with 113 vessels either docked or at anchor, said Capt. Kip Louttit, executive director of Marine Exchange of Southern California. And of those, 59 were at anchor or drifting — one shy of the single-day record.
The congestion has prompted some ships to be sent to other ports, including the Port of Oakland, rather than wait outside the breakwater for a week or more.
Contributing to the backup, Seroka said during his news conference, is a workforce shortage, with some 800 out of 15,000 longshore workers out either because they tested positive for the coronavirus or are in quarantine after being exposed to the virus.
“Because of (COVID-19), not all workers are on deck every day,” Seroka said, adding that the union is still “processing cargo at record numbers, with the average worker out on the job more than 5.5 days a week. They’re putting every (available) person on the job but there’s just a lot of cargo.”
A lobbying effort is ongoing, Seroka said, to provide expedited vaccinations for dockworkers, adding that a “mass vaccine site” can be made ready at the World Cruise Terminal in the port.
“We’ve got to get our workers vaccinated,” Seroka said.
Primarily, though, the longer wait times are due to “a pandemic-driven buying surge unlike anything we’ve ever seen,” Seroka said.
E-commerce especially has seen a dramatic uptick, he said, adding that the trend likely won’t change.
With travel and other entertainment options shut down, people have had to adapt their lifestyles. So, Seroka said, consumers turned to tangible goods, especially those from big box stores, including home office goods and home exercise equipment. Online sales doubled in 10 months, Seroka said, contributing to the LA port’s 50% increase in cargo over the second half of 2020.
Cargo forecasts for February and March, he said, are looking to be as much as 34% to 40% over those months in 2020, “when we hit the abyss” of the pandemic.
The supply chain stress has also hit warehouse space in the Inland Empire, where so-called “street dwell time” is about seven days to land space for a 40-foot container.
“That’s quite high for us,” Seroka said.
“Resources,” he added, “continue to be stretched thin at warehouses that are at or near capacity.”
Reducing the backlog of anchored ships, Seroka said, is a high priority.
“We have to be realists and with 62 ships at anchor, we’ve got to do something different,” he said.
Expanding digital information systems is one way to help, Seroka said, along with offering incentives to terminal operators that achieve faster truck turn times.
“We are working closely with both the ILWU and PMA,” Seroka said, referring to the longshore union and the organization that represents terminal operators. “We’ve got to do a better job to scale up or scale down; we’ve got to be able to flex a bit more than we’ve seen in the past.”
Seroka said he anticipates there will still be ships at anchor this summer.
“Our goal is to keep chipping away at this,” he said of the congestion.
Still, the ongoing surge is a positive sign for the economy’s ability to recover from the hit it took as the pandemic raged last year, port officials said.
“After the volatility with cargo volumes in 2020,” Port of Long Beach Executive Director Mario Cordero said in a news release in early February, “we hope to see some stability and continued economic recovery over the next year as we remain focused on attracting business and building for the future.”
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