Labor peace drives West Coast rebound in market share of Asian imports
After plunging to an eight-month low in July, the West Coast’s share of US imports from Asia nudged slightly higher in September after increasing strongly in August, an upward trend that is expected to continue into the new year now that labor uncertainties have been put to rest.
“We’re definitely seeing cargo coming back to the West Coast,” Weston LaBar, chief spokesperson for Cargomatic, a Southern California logistics and drayage provider, said to the Journal of Commerce.
Fifteen months of labor instability and disruptions along the West Coast ended in August when the International Longshore and Warehouse Union (ILWU) ratified a new contract with waterfront employers. During that time, shippers pushed growing volumes of discretionary cargo to the East and Gulf coasts to avoid labor-related problems, cutting into the West Coast’s share of Asian imports.
However, with labor peace in place along the West Coast, some of that cargo is starting to shift back, and now shippers are watching two other developments that could benefit the West Coast: the draft limitations at the Panama Canal that have reduced vessel capacity on all-water shipments from Asia to the East Coast and the longshore contract negotiations next summer between the International Longshoremen’s Association and East Coast employers.
“There’s a lot of posturing to get back to the West Coast. There’s a multitude of reasons,” LaBar said.
The coastal market shares of US imports from Asia have been choppy all year due to disruptions in the trans-Pacific supply chains to the East and West coasts, as well as job actions at both US and Canadian West Coast ports. The Canadian disruptions during the ILWU Canada contract negotiations added to retailers’ lack of confidence in the West Coast this summer.
“The Panama Canal and the strike in Canada created operational hurdles,” a carrier executive said.
Increased blank sailings in the trans-Pacific have also contributed to schedule disruptions, he added.
The West Coast’s share of Asian imports has fluctuated throughout the year, beginning with a 54.4% share in January, which climbed to 59.2% in June before dropping sharply to 53% in July, then recovering to 57.8% in August and 57.9% in September, according to PIERS, a Journal of Commercesister product within S&P Global.
The East Coast’s share of Asia imports, at 35.8% in January, fell to 33.6% in September. The share for the Gulf Coast fell from 9.5% to 8.1% during the same period.
Total US imports from Asia, meanwhile, have increased steadily this year since the low point of 1.08 million TEUs in both February and March, hitting 1.5 million TEUs in September, according to PIERS, highest since August 2022. That was also the last month, until September, that Asian imports showed a year-over-year increase; imports last month were up 1.4% from September 2022.
Southern California gateway prepared for more cargo
Port and terminal sources are confident the uptick in West Coast market share will continue. Gene Seroka, executive director of the Port of Los Angeles, said retailers in September began to return an increasing share of their discretionary cargo to the West Coast following the ILWU contract ratification. Also, key operational indicators such as container and chassis dwells and truck turn times all point to port fluidity, which further boosts the confidence of retailers in the Los Angeles-Long Beach gateway, Seroka said.
“There’s a lot of confidence in the West Coast,” he said.
The average truck turn time in Los Angeles-Long Beach in September was 72 minutes, lowest since the 70 minutes recorded in November 2022, according to the Harbor Trucking Association. The average dwell time for containers in Los Angeles-Long Beach that leave marine terminals by truck was 2.89 days in August, down from 3.08 days in July. Containers leaving the terminals by rail dwelled an average of 4.45 days, up slightly from 4.14 days in July, according to the Pacific Merchant Shipping Association (PMSA).
“We’re happy to see dwell times for rail and truck cargo have remained consistently low from month to month,” said Michele Grubbs, PMSA vice president.
The average street dwell time for 40-foot chassis in September was six days, down from almost 10 days in September 2022, according to the Pool of Pools that is managed by the three largest chassis providers serving the port complex.
Imports at the Port of Long Beach in September increased almost 20% over September 2022, said Noel Hacegaba, deputy executive director and chief operating officer at the Port of Long Beach. “This recent uptick in our volumes reflects a shift back to the West Coast that commenced in August and that has been sustained by the ongoing issues at the Panama Canal,” Hacegaba said.
The West Coast ports of Los Angeles, Long Beach, Oakland and the Northwest Seaport Alliance of Seattle and Tacoma in September handled a combined 870,220 TEUs, an increase of 12.8% over September 2022 and up 3.2% from August 2023, according to PIERS.
SSA Marine, which operates container terminals in Seattle, Oakland and Long Beach, calculates its combined volume at the three gateways each month to determine the company’s profitability. In September, for the first time in a number of months, the total volume reached the level that SSA needed “to be [profitable],” said Ed DeNike, president of SSA Containers.
Source: Journal of Commerce
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