The busiest US port sees cargo business slowing into the holiday season

Cargo volumes at the Port of Los Angeles fell for a second month in September and the outlook remains “soft” for the rest of the year, according to Gene Seroka, the head of the nation’s busiest container port.

The port handled 709,873 twenty-foot equivalent containers last month, down 22% from a year ago and the lowest amount for September in seven years, according to an emailed statement on Wednesday. Volumes so far this year are 4% lower than last year’s record-setting levels, said Seroka.

The number of imports into Los Angeles fell 26.6% from a year ago to 343,462 containers, the weakest September for inbound shipments since 2009. There were also fewer container imports into neighboring Port of Long Beach.

The slowdown reflects a shift in cargo patterns, with retailers pulling up shipments this year to June and July. September has historically been a peak season. Consumers are also turning more cautious about the economy, and growing worries over the ongoing labor negotiations with West Coast dockworkers have caused shippers to re-route through eastern Gulf Coast ports, said Seroka.

“Record high inflation, fuel costs, interest rates and other uncertainties are making Americans cautious, which could impact discretionary spending,” Seroka said in a briefing. “The upside: consumer hesitancy and abundant retailer inventories could lead to merchandise markdowns ahead of the holiday season.”

The most recent data show US retail sales stagnating, a sign that the hottest inflation in four decades is starting to take a toll on the economy. Operations at the twin ports of Los Angeles and Long Beach have gradually returned to normal after two years of a disruptive supply-chain crisis that caused widespread congestion. The ports together handle about 40% of all US containerized trade with Asia. 

More recently, some shippers have been diverting cargo to other parts of the country as talks to negotiate a contract for 22,000 dockworkers in California, Oregon and Washington enter their fifth month. Members of the International Longshore and Warehouse Union have been working without a contract since their previous pact expired July 1.  

“As for the half dozen or so remaining unions, we continue to support the collective bargaining process and we’re hopeful that all parties can reach agreement and resolution soon,” Seroka said.