POLA and POLB August volumes are strong despite economic uncertainty and COVID-19 concerns

August volumes, at the Port of Los Angeles (POLA) and the Port of Long Beach  (POLB), which each port recently released, each set respective records.

Total POLA volume—at 961,833 Twenty-Foot Equivalent Units (TEU)—were up 11.7% annually, marking the highest-volume month in the port’s 114-year history, topping October 2018, which was above 952,000 TEU. What’s more, it also represents the fifth time ever that the POLA has exceeded 900,000 TEU of throughput.

POLA said this tally was paced largely by imports, which came in at 516,285 TEU, for a 17.98% annual increase. Exports—at 131,428 TEU—were off 10.165 annually and empty containers—at 314,118 TEU—headed up 13.2%.

Even with this August surge, year-to-date POLA volumes—at 5,580,110 TEU—are down 11.59% annually.

“In May we saw our lowest container volumes in more than a decade,” said Port of Los Angeles Executive Director Gene Seroka, in a statement. “Since then, there has been a significant replenishment of warehouse inventories. Coupled with retailers planning for consumer holiday spending, it has created a surge of imports.”

On a POLA-hosted media call, Seroka explained that 89 vessels called at POLA over the month of August, with only one cancelled sailing, adding that to meet demand, seven ad-hoc, or unscheduled sailings, were put in place in August as well.  And he added that the average exchange per vessel—which represents how many containers the port loads and discharges—stood at 10,817 TEU, which is another record, topping the previous milestone set in August 2019, when it stood at a little more than 10,000 TEU.

“August volume is more than double what we moved in March, when we dropped sharply with the onset of nationwide shutdowns,” Seroka said on the call. “However, with this amount of volume, we also see complexity within the supply chain. We are working with stakeholders on the challenges that arise on one way import surges like the one we are seeing right now. We are listening closely, responding and staying nimble to the needs of our customers and partners. The bottom line on August: we are seeing both replenishment of warehouse and distribution center inventories, along with retailers prepping for year-end holidays. The supply chain has been choppy for the last two-and-a-half years. While we built up some inventory during pre-tariff milestones, that has been predominantly worked down. Now, we are restocking that inventory that goes all the way to the store shelves and our homes."

The POLA’s top executive offered up a word of caution, in that one month or even one quarter does not make a trend.

“Despite this import surge that we are seeing, the U.S. economy and global trade face significant challenges,” he said. “Cargo volume remains down nearly 12% annually, through August. The trade imbalance has deepened, with American exports continuing to struggle. In my view, our economy remains in a very precarious position.”

POLB data: At the Port of Long Beach, total August volume—at 725,610 TEU—saw a 9.3% annual gain, marking the best August tally over the port’s 109-year history and what it called a strong start to Peak Season, at a time when the ongoing COVID-19 pandemic continues to create an uncertain economic environment.

August POLB imports—at 364,792 TEU, were up 13%, and exports eked out a 1% annual gain, to 126,177 TEU. Empty containers—at 234,642 TEU—saw an 8.5% increase.  Over the first eight months of 2020, total POLB volume—at 4,911,725 TEU—is down 1.2% annually.

“Despite the recent surge in cargo, uncertainty remains in international trade and the national economy, given the ongoing COVID-19 impacts,” said Mario Cordero, Executive Director of the Port of Long Beach, in a statement. “August marked another great month for the Port, but we must remain vigilant about the global pandemic’s lasting effects.”

POLB officials said that these volume gains arrived at the outset of Peak Season, which spans from August through October, with retailers preparing for the holiday shopping season. They also observed that, in August, demand goods like home improvement items and home exercise equipment contributed to the increase in shipments, along with another short-term increase in extra vessel visits that made up for voyages that were canceled earlier this year.