LOS ANGELES — Shippers are looking to the West Coast as they steer their supply chains away from Red Sea attacks and drought conditions at the Panama Canal, the Port of Los Angeles confirmed this week.
“Recently, as I've traveled overseas shippers are beginning to tell me that they're starting to reroute cargo over to the West Coast of the United States, and avoid these hotspots,” Executive Director Gene Seroka said at a media briefing Wednesday.
As shippers continue to raise the alarm over insecure trade along the Red Sea, some have already chosen to redirect cargo to the West Coast before using intermodal options to ship cargo back to the East Coast.
Although there has not been a deluge of freight, the port is seeing an uptick in volumes because of the uncertainty and other seasonal factors such as Lunar New Year, Seroka said.
Cargo volumes at the Port of Los Angeles rose 18% year over year to 855,652 total TEUs in January, marking the port’s second busiest January on record, Seroka said.
Cargo volumes by the numbers
At the same time, loaded import volumes were up 19% YoY as retailers found themselves in a drastically different inventory position ahead of Lunar New Year than last year.
Shippers have been actively replenishing inventories and seeking to move goods early ahead of factory closures for the 10-day holiday, the port director said.
In addition, record holiday sales and January jobs growth combined to give manufacturers and retailers hope for more spending by American households, Seroka said.
Disruptions along the Red Sea and Panama Canal continue, and their impact on port volumes at the Port of Los Angeles are yet to be known. But Seroka said the port has the capacity to handle additional cargo if there’s “an inner desire to reroute in this direction.”
“Our port optimizer, that port community information sharing system, now gives us visibility about 40 days upstream, before a cargo ship comes here to Los Angeles,” Seroka added. At this time, the port is “running at about 75% to 80% of capacity.”
