June volume for ports of Los Angeles and Long Beach see annual declines

June volumes at the Port of Los Angeles (POLA) and the Port of Long Beach (POLB) both saw annual declines, according to data issued by the ports this week.

West coast port volumes have been uneven over the last several months, as ports had to work through the backlog caused by the nine-month West Coast port labor dispute between the Pacific Maritime Association and the International Longshore & Warehouse Union, which reached a resolution in the form of a new contract agreement that was reached earlier this year.

What’s more, the ports are now facing difficult annual comparisons, due to the fact that a year ago port throughput was especially high in advance of the pending expiration of the labor contact at that time. During the months leading up to the contract, many shippers moved large amounts of cargo earlier than usual due to concerns over the labor negotiations. And uncertainty over that situation led to labor unrest and uncertainty that impacted freight flows and port operations in the form of terminal congestion and related supply chain challenges until PMA and ILWU reached their tentative agreement in February.

Total POLA volumes in June were down 2 percent compared to June 2014 at 721,802 TEU (Twenty-Foot Equivalent Units).

POLA imports, which are primarily comprised of consumer goods, decreased 3.65 percent at 368,708 TEU, and exports were off 10.7 percent to 143,549 TEU. Empties were up 8.6 percent at 209,544 TEU.

On a year-to-date basis, total volumes are down 3.67 percent at POLA at 3,903,521 TEU, with annual volumes down in four of the first six months of 2015.

June volumes at POLB declined 4.4 percent annually at 583,621 TEU.

Imports were down 6 percent to 297,189 TEU, with exports off 8.4 percent to 128,223 TEU, while empties headed up 2.4 percent to 158,209 TEU.

The issues caused by the West Coast port labor situation saw some shippers divert cargo entering through West coast ports to Eastern and Gulf ports, which is still happening. As reported in LM yesterday, data from Zepol, a global trade and intelligence provider, found that a “hefty chunk” of businesses have switched from using Pacific to Atlantic and Gulf ports this year. Total imports along the East Coast have increased by 15 percent, while import traffic on the West Coast is down 4 percent, says Zepol.

“June import volumes were slightly disappointing relative to our expectations; however, we attribute a portion of the year-over-year and sequential declines to difficult comparisons, as well as on-going diversion to Eastern and Gulf ports,” wrote Todd Fowler, KeyBanc analyst in a research note. “Looking ahead, we anticipate a portion of volumes to revert back from Eastern and Gulf ports, helping comparisons, as well as some seasonal build in 2H15.”