West coast import box slide set to be arrested

US ports have seen a double-digit decline in import volumes for the tenth month in a row, but the expectations are that these monthly falls will slow considerably from August onwards.

Year-on-year volumes in the ten largest US ports showed double-digit increases up to July 2021, slowing in August of that year, the last pandemic year, with analysts expecting the comparisons to reflect those figures.

Those volume declines eased in July 2022, with just a 0.3% year-on-year decrease but overall the ten largest ports in the US showed a 12.5% fall in July, which continues the double-digit import volume falls from March through to June, which saw 31.6%, 21.6%, 20.1% and 18.9% respectively, according to Blue Alpha Capital analyst John McCown.

Exports have seen a fourth month of declines, by 2.3% after five monthly increases.

However, McCown argues that July 2021 was the last month of double-digit expansion in port volumes at the ten US ports, this would mean the percentage comparisons for August will not be as drastic.

“We know we’ll be moving away from double-digit percentage declines by this August because August 2021 was the first time in a dozen months that the year-over-year percent gain was not a double-digit percent increase,” writes McCown.

West coast ports took the major hit to volumes, seeing a fall of 21%, year-on-year with east and gulf coast ports suffering a comparatively smaller decrease of 4.4%.

There is an expectation that June’s agreement between the employer’s body, Pacific Maritime Association, and the docker’s union, International Longshore and Warehouse Union (ILWU), would see much of the freight lost to the east and gulf ports return to California, but that will not be reflected in the data for another couple of months.

Another impact that has yet to be seen in the volume data has been the drought in Panama, resulting in draught related curbs on vessels transiting the Panama Canal.

Constraints on loads, earlier this month, saw one Evergreen ship, Ever Max, a 17,312 TEU neo-Panamax ship, delivered in June, forced to offload 1,400 loaded containers in order to transit the canal, via the neo-Panamax locks.

“This may augment any swing back to more west coast discharge over the near term,” argues McCown.

Los Angeles and Long Beach July imports were hit hardest at 24.2% and 27.9% respectively, down to 367,983 and 271,086 TEUs. New York and Savannah saw 6.5% and 8.6% falls, to 376,717 and 230,225 TEUs respectively.

Export volumes have also seen what McCown calls a “coastal gap” with only nine of the previous 41 months showing year-on-year increases in west coast export volumes. The average export decline over this period has been 4.2%.

However, it was Oakland up 23.1%, Houston up 14.6% and Charleston 9.2% that saw the largest increases in export volumes, 58,059, 117,652 and 53,827 TEUs respectively.

The top 10 ports include the west coast facilities at Los Angeles, Long Beach, Oakland and Seattle/Tacoma and the east coast ports of New York, Savannah, Charleston and Norfolk with Houston in the Gulf.

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