Dive Brief:
- The Port of Los Angeles is planning for a 5% year over year uptick in cargo volumes, in the next six to eight months, as conflict in the Red Sea persists and draft restrictions from the Panama Canal have begun, Executive Director Gene Seroka said during a media briefing on Tuesday.
- While Seroka said the uptick in volume is not a promise, he said the port is prepping though conversations with the Harbor Trucking Association, marine terminal operators, shipping lines and the International Longshore and Warehouse Union.
- Due to the ongoing concerns at the Suez Canal and the Panama Canal, “more cargo is going to be flowing through the West Coast ports and primarily here to southern California,” Seroka said. He added that "seeing different routes, like ones through the West Coast, can not only cut down on transit time, but also the cost associated with shipping those goods."
Dive Insight:
In recent years, major shipping lines have avoided transiting the Suez Canal due to Houthi-led attacks on cargo vessels. But some carriers have slowly begun to resume transiting the waterway. For example, one of Maersk's vessels successfully traversed the Red Sea, per a July advisory from the carrier.
Meanwhile, the Panama Canal has announced a series of draft restrictions through the summer as it seeks to take preventative measures in the event a drought occurs similar to the one it experienced in 2023. Its next draft restriction is set to take effect in early September.
While disruptions could drive more cargo to the West Coast, the Port of Los Angeles has already been seeing an uptick in volumes driven by shippers frontloading cargo, bringing forth an early peak season.
“What we saw this year was that many importers saw a window of opportunity from May, June and July to speed cargo into market with the temporary tariffs defined by Section 122 of the 1974 Trade Act, they were going to and set to expire on July 24th,” Seroka said.
President Donald Trump imposed a global 10% tariff based on Section 122 earlier this year before it expired last month.
The Port of Los Angeles processed 960,464 TEUs last month, the second-busiest July in the port’s history, Seroka said. Volumes were down 6% year over year but up 7.5% from the port’s five-year average for the month.
“We expect another strong month in August, although some cargo that traditionally arrives later in the season has already moved,” Seroka said in a press release.
