U.S. West Coast Facing “The Drumbeat of Bad News”

West Coast supply chain managers seeking to locate empty ocean cargo containers for outbound calls have been hammered in recently by a combination of events. Peter Friedmann, executive director of the Agriculture Transportation Coalition, noted that “the drumbeat of bad news” has been begging for diversion.

That silver lining seemed to surface earlier this week when the San Francisco Bar Pilots directed the navigation of the Grand Princess to Pier 22 at the Port of Oakland. As the Pilots do every day, they assumed navigational command of the ship and safely brought it to Oakland.

“Significant preparation and planning went into the operation, including providing appropriate safety measures and personal protective equipment for the Pilot. The Pilot boarded the ship at 10:00am and has disembarked., said Captain Joseph Long, President of the San Francisco Bar Pilots.

Meanwhile there's scant good news on the U.S. Pacific Rim regarding the impact of the virus.

For example, cargo volume declined at the Port of Long Beach in February due to fewer ship calls amid the overseas outbreak of the coronavirus and lingering effects of the trade dispute with China.

Terminal operators and dockworkers moved 538,428 twenty-foot equivalent units (TEUs) last month, down 9.8% compared to February 2019. Imports dropped 17.9% to 248,592 TEUs, while exports increased 19.3% to 125,559 TEUs. Empty containers sent overseas decreased 12.8% to 164,277 TEUs.

Although a Phase 1 preliminary trade agreement was signed in January by the United States and China, about $370 billion in Chinese goods remain under the increased tariffs.

The coronavirus has caused further disruption to the supply chain with an increase in canceled sailings and a reduction in cargo moving through the nation's second-busiest port.

“With the extended factory closures and slowdown of goods movement in China and other Asian countries in February due to Lunar New Year and COVID-19, we are seeing shipping lines needing to cancel some sailings,” said Mario Cordero, Executive Director of the Port of Long Beach. “Once the virus is contained, we may see a surge of cargo, and our terminals, labor and supply chain will be ready to handle it.”

“Along with the economic effects of reduced trade due to the health situation, we also have the first confirmed cases of COVID-19 in Long Beach. We hope for the swift recovery of these individuals,” said Long Beach Harbor Commission President Bonnie Lowenthal. “The port will continue to monitor the outbreak internationally, and work with our stakeholders to keep our crucial link in the supply chain open and operating.”

Meanwhile, the neighboring Port of Los Angeles moved 544,037 TEUs in February, a 22.9% decrease compared to last year.

“While cargo volumes are important, the coronavirus is first and foremost a public health crisis that needs to be brought under control with the collaboration of governments and medical experts from around the world,” said Port of Los Angeles Executive Director Gene Seroka. “We are more interconnected than ever with our global partners so it's no surprise that Trans-Pacific maritime trade has been significantly impacted.”

“As factory production in China remains at low levels, we expect soft volumes in March. Looking ahead to anticipated manufacturing improvements, we will need to return empty containers to Asia and push lingering U.S. export boxes out swiftly,” Seroka added. “We're actively working with our supply chain partners to be prepared for a cargo surge once production levels ramp up.”

February imports decreased 22.5% to 270,025 TEUs compared to the previous year. Exports decreased 5.7% to 134,468 TEUs. Empty containers declined 35% to 139,544 TEUs. In total, February volumes, also adversely impacted by the Lunar New Year holiday celebrated in Asia, totaled 544,037 TEUs. For the first two months of 2020, total container volumes are 1,350,181 TEUs, down 13% compared to last year.

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