West Coast Ports Regain Some Lost Share of Container Imports
Retailers and other importers are returning business to ports from California to Seattle, but the West Coast remains behind the standing it held a year ago
California’s Port of Long Beach, which reported a 1% decline in loaded container imports in the first half of 2015. PHOTO: BLOOMBERG NEWS
U.S. West Coast ports are regaining some of the share of import supply chains that they lost during recent labor strife at the nation’s largest gateways.
Their share of container imports—measured in the dollar value of goods—rose to 47.1% in June, up from 45% in April and May, according to data released Wednesday by the U.S. Census Bureau.
Although the ports remain behind the majority share they held a year ago, the improvement suggests that big shippers, including major retailers, are restoring business to the West Coast as the memories of the epic delays they faced until this spring recede.
“We’re seeing the beginning of trade migrating back to the West Coast ports as we expected,” said Jock O’Connell, an international economic analyst with Beacon Economics.
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The decisions by shippers on where to bring their goods, mostly products manufactured in Asia, reverberate across the country, affecting rail and truck routings, construction and hiring at distribution centers, and they can influence infrastructure investment choices.
June’s 47.1% share of the imported cargo for the West Coast remains below what it’s been over the past few years. In June 2014, the West Coast ports moved 51.8% of imported goods, and a year before that they handled 52.5% of the goods.
Importers have warned that they would redraw long-standing supply chains by routing more cargo to the Gulf and East coasts after protracted labor negotiations with West Coast dockworkers, which began last spring, caused delays at the Pacific ports.
The International Longshore and Warehouse Union reached contract terms with cargo companies in late February, as dozens of ships remained anchored off the ports unable to reach docks because of long delays in unloading cargo. It took weeks after the agreement was reached to clear the backlog that had developed. Many shippers continue to send goods through alternate hubs, either because they see the sites as more reliable or because shippers entered long-term contracts to send goods via different routes.
The value of West Coast imports hit a low in February, bounced back in March as the backlog was cleared, and was back down in April and May. In June, West Coast import market share rose again.
Overall, the value of container imports nationwide is up 3% so far this year, Mr. O’Connell said, and June marks the beginning of the peak shipping season leading up to the holidays. “I think there’s a fairly good chance,” he said, that by the end of the year West Coast ports will “get back up to that 50% level they had last fall.”
Despite the overall numbers, major ports on coasts still seem to be moving in different directions, based on individual port reports, which measure the volume of cargo rather than the value.
In June, the Port of New York and New Jersey—the East Coast’s largest port for container volume—imported 279,038 full containers, an increase of 15.5% over 2014. And Georgia’s Port of Savannah was up 39% in June over the same month a year ago. The Port of Los Angeles, meanwhile, imported 368,708 full containers in June, a 3.7% decline from last year while Long Beach import volume fell 6%.
