West Coast ports see volume drop, blame tariffs

Dive Brief:

West Coast ports saw steep declines in import numbers in October, compared to the same month in 2018 when container ports saw record volumes due to shippers importing cargo ahead of tariffs.
The Ports of Los Angeles, Long Beach and Oakland saw 19%, 7% and nearly 5% year-over-year declines in October import volume, respectively. While all three ports saw a decline compared to last year, import levels at the Ports of Los Angeles and Oakland were still higher than in October 2017.
Rates from China and East Asia continue to work in shippers' favor with prices dropping more than 40% YoY between China and the West Coast and 27% YoY between China and the East Coast, according to the latest numbers from Freightos.

Dive Insight:

The ports placed blame for the volume declines on the U.S. trade war with China.

"With 25% fewer ship calls, 12 consecutive months of declining exports and now decreasing imports, we’re beginning to feel the far-reaching effects of the U.S.-China trade war on American exporters and manufacturers," Port of Los Angeles Executive Director Gene Seroka said in a statement.

Seroka said the port expects soft volume numbers in the months ahead and pressed for a trade agreement.

Prices on shipping routes may be down YoY, but recent upticks indicate peak season arrived in early November. Shippers are still stockpiling ahead of planned tariff increases, "which may help avoid a total price freefall," Freightos Chief Marketing Officer Ethan Buchman said in a statement emailed to Supply Chain Dive.

"Early indications are that prices will indeed fall and that we’ve reached the peak of peak season, while 2020’s new low-sulfur fuel regulations may help keep prices from falling too dramatically, most signs are pointing to this being the full extent of peak season," Buchman said. "Flagging global production, some diverting of sourcing from China and strong supply management by suppliers have held prices back."

But the lack of concrete details surrounding the trade talks with China makes it hard for shippers and ports to plan for what to expect in the coming months.

"Industry planning is in a state of confusion with the on-again, off-again tariff increases and the widening of trade disputes," Hackett Associates Founder Ben Hackett said in a statement earlier this month.