The Port of Los Angeles’ January import numbers highlight that the inventory glut of 2022 and early 2023 is basically within the rearview mirror. The port experienced the second-best January on record, surpassed only by January 2022, which was fueled by pandemic-related spending.
The port handled 855,652 total TEUs during January, eclipsing last 12 months’s mark by 18%. The expansion in comparison with pre-COVID levels is minimal, with the port handling only 0.4% more TEUs through the month than it did in January 2019.
While the Port of Los Angeles experienced the second-highest-volume January from a complete TEU perspective, loaded imports had the very best January on record. The Port of Los Angeles handled 441,763 TEUs through the month, up 19% 12 months over 12 months. The previous strongest January was in 2021, when the port handled 437,609 loaded TEUs.
In a media briefing Wednesday afternoon, Gene Seroka, executive director of the Port of Los Angeles, highlighted two aspects that contributed to the expansion in imports: replenishing inventories at a faster clip ahead of the Lunar Recent 12 months holiday, which began Saturday, and consumer spending.
The inventory replenishment rationale is far more of a driver as retail sales figures released by the U.S. Census Bureau on Thursday morning dropped by 0.8% month over month. Sales were 0.6% higher than they were last 12 months, however the retail sales metrics aren’t adjusted for inflation. The decline isn’t as severe as when isolating consumer goods by removing spending on motorcars and parts in addition to spending at gas stations. By that metric, sales were down 0.5% m/m but still 2.2% higher y/y.
The Logistics Managers’ Index in February highlighted the expansion in inventory levels after months of contraction.
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The pull-ahead for the Lunar Recent 12 months will help boost import volumes on the Port of Los Angeles in February as well. The February import figures will likely show larger growth y/y than January as a consequence of the timing of the Lunar Recent 12 months, and March will see the impacts of the Lunar Recent 12 months, which could still show growth y/y.
The Inbound Ocean TEUs Volume Index for the port shows the y/y growth in TEUs as they’re leaving various ports across the globe despite the Lunar Recent 12 months holiday being firmly underway. The query that continues to be is, what is going to the rebound from the vacation appear to be?
One other tailwind for the port is the situation within the Panama Canal. There have been more scheduled slots through the drought-stricken canal in January, but it surely didn’t end in more transits. These impacts will likely be a tailwind for the port throughout the dry season in Panama, which extends into May.
The strongest growth on the Port of Los Angeles got here in the shape of loaded exports. The port handled 126,554 loaded export TEUs, the very best variety of outbound loaded containers since November 2020. Loaded exports were up 23% y/y in January.
Loaded international intermodal container volumes for the Los Angeles market, which has each the Port of Los Angeles and the Port of Long Beach inside its boundaries, held up y/y for much of January but was also strong within the back half of December, which helped boost loaded exports in January.
The expansion in inbound loaded international intermodal container volumes into the Los Angeles market in February will likely help boost loaded export volumes in the approaching months.
The Port of Los Angeles has capitalized on aspects impacting global trade, and the upcoming labor negotiations between the International Longshoremen’s Association union and the East Coast ports could help generate an extended tailwind for the port at the center of the U.S.’s freight economy.
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