Port Breaks Cargo Volume Records

LONG BEACH, CA—In August, the Long Beach Port broke import cargo volume numbers for the second month in a row. During the month, the port reached 703,652 twenty-foot equivalent units, a 22.8% increase year-over year. According to Art Wong, of the Long Beach Port, this is a clear indication that retailers are confident in the economy and are boosting their orders for the fall and holiday seasons.

“It looks like cargo was coming back after being diverted earlier in the year after the delays and back-ups that we had had over the winter last year. The August numbers are so strong that the inventories were wiped out, and so importers in particular are ordering a lot to replenish what they have on those shelves and they are starting to make a big bet on sales for this fall,” Wong tells GlobeSt.com. “The GDP numbers are strong, and may even be stronger than we originally anticipated. There is a lot of optimism, and the strong dollar is making imports cheaper than usual. Plus, over the past few months, China has been devaluing and making goods even cheaper. If you add all of this together—a strong US economy and lower cost imports—there is a lot of reason for importers to be really optimistic.”

In July, the Long Beach Port also broke import volume records. During the two months, a combined total of 1.4 million TEUs of volume moved through the port. The increased volume isn't a two-month fluke. The port has seen steady import volume growth this year, with a total 5.4% increase when compared with the first eight months of 2014.

When asked if the record-breaking streak would continue, Wong couldn't be sure; however, he noted that optimism in the economy isn't going away. “It is hard to predict that we are going to continue to break records, but it is clear that the concerns about delays from last winter are gone. Cargo has come back after our team went out to reassure everybody that everything is good,” he said. “That business is here, and now it is just a matter of the strength of the economy. Clearly it was strong in the second quarter and the retailers who are placing all of these orders are betting that it is going to continue to stay strong as they begin to place orders for the holidays.”

Although the ports have seen a steady increase in import volumes, export volumes are decreasing by double digits, with empty cargo containers being shipping back to their origin. Although this doesn't seem to be a cause for concern, the decline illustrates that warehousing space over manufacturing space will drive the industrial market around the ports.