Importers couldn't stay away from U.S. ports on the West Coast for long, and they're driving a meteoric rise for the Port of Long Beach.
For the second month in a row, traffic at the Port of Long Beach has hit a record high and the terminal has inched closer to overtaking neighboring Los Angeles as the single largest port in the U.S. in terms of cargo volume. Up until February 2015, ports up and down the West Coast – and especially those in Los Angeles and Long Beach – had struggled with congestion issues and labor strife. But with a dispute between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) behind them, these marine complexes have been working feverishly to recover cargo volume lost to ports along the Eastern seaboard.
Surging trade volume evidence of Long Beach's rise
Thus far, those efforts have been relatively successful. Trade volume at the Port of Long Beach grew significantly in August, following a July surge, both of which have combined to set the terminal up to take the number one spot as the busiest port in the country. The complexes at Los Angeles and Long Beach have been coordinating to ensure that the congestion that plagued them through the latter part of 2014 and early 2015 doesn't bleed into the second half of this year, and though they haven't placed all the issues behind them, they are certainly making progress.
"Our partners once again have expressed their confidence in the Port of Long Beach and we thank them for their business," Jon Slangerup, chief executive officer of the port, said in a statement. "We have been working with all our stakeholders and the results are our best month ever."
New customers and expensive investments behind growth
The surge in cargo volume at the Port of Long Beach can also be attributed to the approaching peak season, and importers' decision to return to the West Coast ahead of the important stretch, the Journal of Commerce (JOC) explained. The terminal reported that three news services recently started calling at the port – development that almost certainly has contributed to the ports surging traffic over the last two months.
In August, overall container volume grew 22.8 percent year-over-year to the highest level it's been in the 104 year history of the Long Beach marine terminal. Through the first eight months of the year, volume is up 8.4 percent over the same stretch last year. Imports grew 19.1 percent year-over-year to 358,262 twenty-foot equivalent units (TEUs). Exports, meanwhile, increased 9.4 percent to 138,765 TEUs.
"We thank our partners for choosing the Port of Long Beach," said Slangerup. "We're building the port of the future by investing $4 billion in improvements because as the economy grows, we will grow. We have not seen volume like this in our entire 104-year history and that is the clearest sign that consumers are buying."
Those investments Slangerup spoke of could end up being one of the driving forces behind Long Beach's bid to overtake Los Angeles as the No. 1 port in the country in terms of volume. Bloomberg suggested that once the automated terminal at Long Beach is completed next year it could take the top spot. Infrastructure improvements at the two largest ports in the U.S. were deemed necessary following the congestion issues that afflicted the terminals.
As ports move deeper into peak season and infrastructure investments at Long Beach come to fruition, the congestion that had become the norm there for some time is moving further into the rearview.