Empty container volumes rise in US-China trade war
- West Coast ports point to a strong holiday season and a rush to beat tariffs as reasons for near record-breaking import volumes in November 2018. The Port of Oakland had its busiest November ever for imports.
- "You’re seeing the opposite effect on the other side of the ocean," Port of Long Beach Executive Director Mario Cordero said in a press release. "Chinese businesses seem to be already looking to other countries for goods and raw materials, meaning there's less demand for American exports and more empty containers are being shipped."
- Empty containers at the Port of Long Beach rose 11.4% in November compared to the previous year, and empty exports at the Port of Oakland more than doubled from November 2017 to November 2018.
Ports on the West Coast of the U.S. have enjoyed the benefits of the U.S.-China trade war this year.
As premier destinations for many of the goods traveling from China to the U.S., the import "rush" by retailers as a way to get ahead of tariffs has resulted in record-breaking volumes for the ports.
November volumes, however, reflect importers' sentiment and decision-making before a 90-day cease-fire was declared, delaying the previously planned tariff hike to 25% on Jan. 1, 2019.
The ports are cautiously optimistic going into 2019. Port of Oakland Maritime Director John Driscoll said, "We approach the new year with uncertainty."
Los Angeles and Long Beach expressed similar concerns, remaining hopeful for continued trade flows but aware of upcoming challenges. The two factors boosting volumes — strong spending into peak season and tariffs — are likely to peter out in the new year, as the holiday season ends and tariffs begin to impact global economic growth.
Cordero brought up a side effect to high volumes of containers coming into the port — more containers leaving the port empty. Empty containers are a common issue on shipping lanes with imbalances of trade. The U.S., for example, imports far more from China than China imports from the U.S. About one-third of ocean containers in circulation at any given time are empty, costing the industry $20 billion per year.
The Port of Los Angeles did not see a rise in empty exports in November over the previous year. Empty exports did rise significantly in October, however, about 33% year over year.
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- Port of Oakland Port of Oakland shatters 11-year-old record for November imports
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