East Coast Strike Scare Sparked Clear Shift in December

Yahoo

28-01-2025

The Ports of Long Beach and Los Angeles had a stellar December that saw both West Coast maritime hubs handle record cargo volumes for the month as imports flooded the U.S. to close the year.
The reports out of California's top two ports buoyed a wider flurry of cargo that hit American ports nationwide. According to data calculated by container shipping expert John McCown, there was a 14.2 percent increase in total inbound cargo volume in December across the top 10 U.S. ports. This represents the eighth largest monthly year-over-year gain in 41 months, he said.
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Two main factors contributed to the import surge as the year concluded. For one, importers sought to bring in more goods ahead of the inauguration of President Donald Trump, whose administration will levy tariffs on countries including China, Mexico and Canada, among others, beginning Feb. 1.
Secondly, there was concern among the shipping industry regarding a possible second strike at the East and Gulf Coast ports, which was averted when the International Longshoremen's Association (ILA) reached a tentative deal with the United States Maritime Alliance (USMX) on Jan. 8.
Those events are likely going to have some spillover into January that would further push up cargo volumes into the U.S.
However, McCown pointed out that the impact of importer front-loading in the months prior has thus far been minimal on retail's overall inventory figures, even with the major end-of-year bump.
'Despite articles and various commentaries, the official Census data shows that any impact from pulling forward volume, whether out of concern related to possible East/Gulf Coast labor unrest or potential increased tariffs…has been minimal,' McCown said, noting that U.S. business inventories at the end of November were $2.588 trillion, up $1.6 billion or 0.1 percent from revised October measures.
While McCown indicated that there hadn't been a 'noticeable' increase in inventories or the related inventory-to-sales ratio, he said there was a clear sign of coastal shifting in December as the ILA strike possibility remained up in the air.
This marks a reversal of what had happened in early-to-mid 2023, he observed, when some shippers avoided the West Coast during the contract negotiations between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA).
December's overall inbound container volume was 2.8 percent above the prior 53-month average, which McCown calculated starting August 2020. During the month, East and Gulf Coast ports were 3.9 percent below their 53-month average while West Coast ports were 9.5 percent above their average.
McCown uses the 53-month benchmark, as it marks the time since the beginning of the 'pandemic effect,' when changing customer spending patterns resulted in shifting volumes throughout container shipping.
McCown's data, presented in the monthly McCown Report, tallies up data from ports in Los Angeles, Long Beach, New York and New Jersey, Savannah, Houston, Norfolk, Seattle, Tacoma, Charleston and Oakland.
The Global Port Tracker report released by the National Retail Federation and maritime trade consultancy Hackett Associates had a more bullish projection for major U.S. ports in December, anticipating growth of 19.2 percent to 2.24 million 20-foot equivalent units (TEUs).
Unlike McCown's data, the Global Port Tracker projections also include data from Florida-based port systems, including Jacksonville, Port Everglades and Miami.
At the Port of Los Angeles, dockworkers moved 921,616 TEUs, up 24.1 percent from the prior December. And the neighboring Port of Long Beach had its most active December ever by moving 861,006 TEUs, up 21.3 percent.
The L.A. port surpassed its December 2020 record total by 4.8 percent, while the L.B. gateway beat that month's total by 5.5 percent.
Imports carried the growth at the Port of Long Beach, with imports jumping 23.9 percent to 412,876 TEUs while exports declined 2.8 percent to 100,792 TEUs. For the Port of Los Angeles, the growth in containers was more even, with inbound cargo volumes increasing 26.4 percent to 461,312 TEUs, while outbound volumes increased 21.8 percent to 460,304 TEUs.
The December volumes across the San Pedro Bay ports capped off an exceptional year of growth in 2024. The Port of Long Beach handled 9.65 million containers, up 20.3 percent over 2023's totals and marking an all-time annual record by surpassing the 9.38 million TEUs moved in 2021. The Port of Los Angeles didn't quite hit a record with its 19.3 percent growth to 10.3 million containers, but 2024 is still the second biggest year for the gateway since the 10.68 million-TEU total throughput in 2021.