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The port of Los Angeles sees a decline in imports of 17%: the first sign of economic depression?

The Port of Los Angeles, the gateway with the largest container volume in America, is deviating from the national trend. Container imports from the United States remain close to all-time highs, but imports to Los Angeles are down in double digits, by as much as 17% from the previous month.

On Thursday, the Port of Los Angeles recorded total handling of 805,672 units equivalent to twenty feet in August, a drop of 15.5% year on year (y / y). Imports amounted to 404,313 TEU, exports to 100,484 TEU and vacuums to 300,875 TEU.

Imports fell sharply, dropping 16.8% year-on-year and 16.7% compared to July. Total imports to Los Angeles were the lowest ever recorded in a month since December, when volumes were reduced by extreme ground congestion and problems in global logistics chains.

It was also the lowest total of imports to Los Angeles for the month of August since 2014, eight years ago, when Barack Obama was president and Pharrell Williams' "Happy" topped the charts.

But last month's import slump in Los Angeles isn't indicative of a nationwide trend. According to Descartes' data, US imports in August remained broadly unchanged from July. Total imports nationwide increased by 18% compared to August 2019, pre-COVID. Los Angeles imports last month fell 8% from August 2019.

The Los Angeles performance stands in stark contrast to the stellar numbers just announced by the Port of Savannah, Georgia. Savannah handled 290,915 TEU of loaded imports in August, by far the highest number in the port's history. Savannah's August imports were up 15.6% from July, 14.7% from the previous record month of May, 20% yoy, and 34% from August 2019, pre-COVID.

During Thursday's press conference, Port of Los Angeles executive director Gene Seroka outlined several reasons for the drop. “Some of the shipments that usually arrive in August for our fall and winter seasons are already here,” said Seroka. “Cargo owners who expected longer lead times shipped earlier to ensure delivery times. This “just-in-case” strategy compared to the traditional “just-in-time” approach has spread to the market ”.

Meanwhile, with 8.3% inflation, Seroka said that “consumers are naturally getting a little anxious, as are retailers. We are starting to see production orders canceled from Asia ”. This part of the decline is linked to fears of a consumer crisis that can become a reality if inflationary pressures are not offset by rising incomes.

Another reason for the weakening August numbers, as evidenced by Savannah's growing statistics: Imports shifted to the East and Gulf coasts at the expense of West Coast ports.

"Some shippers have diverted cargoes to East Coast and Gulf ports to avoid port congestion and as a possible hedge against West Coast contract negotiations," said Seroka. "As a result, those ports have significant backlogs, while congestion is minimal here in Los Angeles."

Another reason for the drop in August is local competition from Long Beach, the neighboring port. A considerable volume of cargo has moved from Los Angeles to Long Beach.


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The article The Port of Los Angeles sees a 17% drop in imports: the first sign of economic depression? comes from ScenariEconomici.it .


This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-porto-di-los-angeles-vede-un-calo-dellimport-del-17-primo-segno-di-depressione-economica/ on Sat, 17 Sep 2022 06:00:20 +0000.