Both the ports of Long Beach and Los Angeles have posted year-over-year declines in shipping traffic during what is usually their busiest time of year.
Imports declined 3.3 percent at the Port of Los Angeles in October and almost 1 percent at the Port of Long Beach compared to last year, but Jock O’Connell, an international trade advisor at Beacon Economics, says there’s little reason for concern.
“The bar was set rather high last year,” said O’Connell.
Remember the months-long labor dispute that crippled shipping traffic that ended earlier this year? O’Connell says in anticipation of that, merchants shipped more goods than normal last October to make sure they had everything on-hand.
“So we had an unusually high level of traffic at the ports last October,” said O’Connell.
A lot of that extra merchandise ordered before the labor slowdown is still sitting in warehouses, so retailers don't need to order as many goods now. Those swollen inventories are why – along with sluggish global growth – JOC Senior Economist Mario O. Moreno just cut his nationwide import forecast from 6.6 percent to 5.4 percent for 2015 and from 7 percent to 5.5 percent for next year.
Still, Moreno says the U.S. is on pace to import 20.02 million TEUs (which stands for twenty-foot equivalent units) this year, which would be a record number of imports.
The head of the Port of Los Angeles also downplayed the significance of October's slowdown.
“This October’s volumes were slightly less than last October,” Port of Los Angeles Executive Director Gene Seroka said in a written statement. “However, the past few months of volumes around and above the 700,000 TEU range show that our terminals, labor and supply chain partners are adjusting to the cargo surges and other fluctuations that come with the larger vessels that are now calling in L.A. – and that’s a good sign.”