The Port of Long Beach is feeling the effects of an impending trade war. Cargo volume was up 11 percent in April, compared to the same month last year, and exports from the U.S. in particular were off the charts — up 22 percent.
According to Mario Cordero, executive director of the Port of Long Beach, cargo volume at the port is largely due to a strong economy.
Some of the cargo volume increase is due to trade tensions
Primarily what you're seeing at the Port of Long Beach is we've had increased trade for the past year. In 2017 it was an increase of 11 percent year to year and in April it was up approximately 11 percent. Trade growth is due in large part to a strong domestic market and good economy.
There is an aspect to this of market uncertainty which has to do with potential tariffs with regard to China and the U.S. Any time you have these types of discussions, it creates market uncertainty, and for us here at the Port of Long Beach, where we've had strong growth from strong consumer demand, it does create concern.
Exports from California are especially high right now, headed for China
On the export side, you're talking about agricultural products particularly as it relates to California: pork, meat, wine, nuts and the spectrum of those products that come from the agricultural discussion of potential tariffs. [They're going to] China.
In addition to what I mentioned, there's also scrap metal and waste paper, but at the Port of Long Beach, 70 percent of our imports are from China and one third of our exports go to China, so it's a primary market for us and for the nation.
Ripple effects on traffic, both on the water and SoCal roadways
There is that potential, but we've done a great job to mitigate that. Trucks here, we're talking 16,000 truck turns a day. And in terms of rail capacity, we have 60 trains that leave the port complex a week, so we haven't seen any congestion at this port here.
We don't foresee any because we've done a great job in the past few years to invest in infrastructure and maximize efficiencies.
How long the spike in cargo volume will last
The projections in terms of container growth when you look out to 2027, you're looking at 20 million containers, so significant growth.
At the Port complex here in 2017, we move 16 million. By 2040, you're looking at 40 million containers, so while we do recognize the economic cycles that occur, we're looking at strong growth. Once these discussions are finalized with regard to the bigger picture between the two countries, we're very well positioned.