Taking Stock at Halftime 2019

By Jock O’Connell

Now that we’ve gathered up all the first-half trade figures, how are the five major U.S. West Coast container ports faring?

The good news is that we are definitely not ready for the“dearly beloved, we are gathered here today” services. But the numbers are frankly discouraging. Yes, the raw numbers are mostly up. Through June, the big USWC container ports did handle 141,105 more TEUs than they had last year at this juncture. Yet that was a gain of just 1.3%, downright meager when compared with other major ports. The Port of New York/New Jersey, for example, recorded a 5.9% first-half increase (+202,372 TEUs), while total container traffic at Houston jumped 11.9% (+155,249 TEUs) and by 6.1% (+128,664 TEUs) at Savannah. Only two ports in the nation sustained year-over-year declines in the number of total TEUs handled during the first-half, Port Everglades (-7.3% or -41,992 TEUs) and the Port of Long Beach (-6,8% or -267,296 TEUs). Leaving Long Beach aside, the other four major USWC ports actually moved 408,275 more TEUs this year than last, a respectable increase of 5.6%.

The Left Coast picture dims, however, when we count only those containers actually containing goods. Inbound loads were down 1.8% (-97,588 TEUs) at all five USWC ports, while outbound loads were off by 5.1% (-136,824 TEUs) from last year’s first six months. 

Thank Neptune for a robust trade in empty boxes making their way back to Asia. At the Port of LA, empties in the first-half of this year jumped by 21.4% from a year earlier. Up at the NWSA ports, empties surged by 34.6% in the first-half, while Oakland’s empty TEU tally rose by 6.2% over last year. At Long Beach, though, empty TEUs were down 0.7%.

Along the USWC, any hopes for higher growth rates were dashed by deeply negative numbers at Long Beach. While 229,504 more loaded and empty TEUs (+5.3%) passed over the docks at the Port of Los Angeles, next door at the Port of Long Beach things were far from copacetic as total container moves fell by 6.8% (-267,296 TEUs). That left the two San Pedro Bay ports, by far America’s principal maritime gateway, in the position of handling 37,792 fewer TEUs than they had a year earlier.

Similarly, where Los Angeles eked out a 1.8% (+40,226 TEUs) gain in loaded inbound containers through the first- half, Long Beach sustained a 9.0% drop (-178,444 TEUs). So, while Oakland (+3.0% or +14,001 TEUs) and the NWSA ports (+4.0% or +26,629 TEUs) reported relatively healthy import numbers, Long Beach’s import massive deficit meant that the number of loaded TEUs passing through USWC ports was down 97,588 from last year, a decline of 1.8%.

Outbound loads from the USWC ports were down except at Oakland, which saw a 2.4% (+10,974 TEUs) increase in its containerized export trade. Elsewhere, the numbers strongly reflected a trading environment hampered by a serious trade conflict with China, a strong dollar, and slowing economic growth abroad. Outbound loads from Los Angeles were down 4.6% (-43,671 TEUs) in the first-half, while Long Beach handled 80,992 fewer outbound loads, a 10.0% drop. The Seattle-Tacoma alliance shipped 23,135 fewer loaded TEUs, a 4.9% fall-off from last year.

Altogether, 136,824 fewer loaded TEUs sailed from the USWC ports in this year’s first-half, a 5.1% decline. The long-term slough. How do these latest figures relate to the long-term slide of the U.S. West Coast ports’ shares of the nation’s containerized import trade? Looking back over the past decade and a half, the actual numbers of imported loaded TEUs have risen substantially at all five ports. Between 2003 and 2018, inbound loaded container tallies have risen 73.1% at Long Beach, 33.7% at Los Angeles, 86.9% at Oakland, and 34.5% at the NWSA ports. Nonetheless, various developments have driven market share numbers steadily (well, almost steadily) lower. That’s apparent from the following graphs.

Exhibits 6-9 portray the USWC ports’ shares of the declared tonnage and value of containerized imports from all nations that passed through mainland U.S. ports between 2003 and the first six months of this year. The following Exhibits 10-13 focus on containerized imports from East Asia and more clearly depict the USWC’s diminishing share of the eastbound transpacific container trade. Each set begins with an overview of all five USWC ports followed by individual exhibits graphing what’s been happening at LA/LB, NWSA, and Oakland. (Note that the years denoted with asterisks cover the first-halves of the respective years.)

I offer these graphs without further commentary, preferring instead to let the trend lines do all the grimacing.

The commentary, views, and opinions expressed by Jock O’Connell are his own and do not reflect the views or positions of the Pacific Merchant Shipping Association. PMSA does not endorse, support, or make any representations regarding the content provided by any third party commentator.