LA/LB Ports witness declines in Jan; rates continue plunge
January 2023 imports declined 13% to 372,040 TEUs at Port of Los Angeles, down 32% to 263,394 TEUs at Port of Long Beach
(Photo Credit: Port of Los Angeles)
The Port of Los Angeles processed 726,014 TEUs in January, a 16 percent decrease from the previous January’s all-time record.
Gene Seroka, Executive Director, Port of Los Angeles
“We expect softer global trade throughout the first quarter, particularly compared to last year’s record-breaking start,” says Gene Seroka, Executive Director, Port of Los Angeles. “Many factories in Asia have had extended Lunar New Year closures, retailers continue to discount products to clear warehouses and inflation-led economic concerns remain top of mind for Americans. With capacity on our docks today, we’re ready to unlock new levels of value and service at the Port of Los Angeles.”
January 2023 loaded imports reached 372,040 TEUs, down 13 percent compared to the previous year. Loaded exports came in at 102,723 TEUs, an increase of 2.5 percent compared to last year. Empty containers landed at 251,251 TEUs, a 26 percent year-over-year decline.
Long Beach sees 28% decline
The Port of Long Beach handled 573,772 TEUs in January, a 28 percent decline from January 2022, "the Port’s busiest January on record. Imports decreased 32 percent to 263,394 TEUs and exports declined 14 percent to 105,623 TEUs. Empty containers moving through the Port were down 29 percent at 204,755 TEUs.
Mario Cordero, Executive Director, Port of Long Beach
“We are taking aggressive steps to meet a new set of challenges for the new year,” says Mario Cordero, Executive Director, Port of Long Beach. “I remain optimistic that we will recapture market share and develop projects that will enhance our long-term growth, sustainable operations and the reliable movement of goods through the Port of Long Beach.”
Contract-spot rates converging
The premium paid by shippers contracting on the long term instead of the spot market has fallen dramatically on several major trades in just a couple of months, says the latest update from Xeneta.
"On five major trades out of the Far East, the average spot rate is now just $810 per FEU lower than the average long-term rate, down from close to$3,900 per FEU just two months ago in mid-December."
The largest fall in the premium between spot and long rates in value terms was from the Far East to the U.S. East Coast. "Spot rates are now $1,280 per FEU, cheaper than long-term rates. In mid-December, shippers were paying $5,180 per FEU more for long-term contracts."
Though carriers initially tried to ring-fence contract rates and protect them at higher levels, high competition for volumes and the possibility of shippers moving to the spot market means they have been unable to maintain the premium for long-term rates, the report added.
Financial crisis redux?
U.S. West Coast ports’ volume down 22 percent YoY – same as during global financial crisis, writes Philip Damas, Head of Supply Chain Advisors practice and Managing Director, Drewry Shipping Consultants in his LinkedIn post.