On-line buying is inflicting stress within the Port of Los Angeles

The number of shipments delivered through the country’s busiest container port complex in Los Angeles has increased significantly from the first half, driven by a recovery in business and a change in consumer habits.

Gene Seroka, executive director of the Port of Los Angeles, said during an appearance on CNBC on Monday that cargo volume increased 50% in the second half of 2020 after arriving at the docks in the first six months of the year, and that loaded ships often anchor at sea waiting for a dock to open.

“It’s all the change in the American consumer,” Seroka said on Power Lunch. “We don’t buy services, we buy goods.”

The surge in shipments has put a strain on the seaport supply chain, which is managed by the Los Angeles Port Authority. It’s a stark contrast to spring, when volume plummeted as the coronavirus pandemic plunged the global economy into recession.

With retailers seeing a surge in online ordering and e-commerce in the world of stay-at-home, it has created long delays in unloading ships at ports across the country and a lack of desired storage space.

Seroka said the port expects demand to surge. The Port of Southern California has been the busiest container port in North America for the past two decades, welcoming 17% of all US cargo.

In November, the Port of Los Angeles saw 890,000 shipments, equivalent to 20 feet, passing through its facilities, up 22% from the same month last year, partly due to vacation orders. Imports from Asia are at a record level, announced the port authority. Meanwhile, exports at the port have declined in 23 of the last 25 months, partly due to trade policy with China.

“In addition to trade policy, it is the strength of the US dollar that makes our goods a bit more than would otherwise be the case for competing nations in the same product categories,” Seroka said. “And right now the most amazing statistic is that we are sending back twice as many empty boxes as we are American exports through our docks.”

Monthly cargo volumes averaged 930,000 units in 20 foot units since August, which Seroka called “unusual” at the end of the year. The activity is expected to last several months.

Seroka said the port has been focusing on digitization to streamline shipping schedules and logistics.

“The port is tense,” he said.