Cargo Volumes Near Record in January

Cargo volumes at the Port of Long Beach neared record-breaking levels in January as part of the pre-Lunar New Year rush. In January 2018, cargo volumes were highest in the port’s history. This January, cargo volumes matched the record, decreased .1%, with a total of 657,286 TEUs handled by the port. Lunar New Year, which was celebrated in February, is historically a slow month for the port, and it is typical to see heightened cargo activity in the preceding month.

“Lunar New Year is a major holiday in China. Factories close to allow workers to travel home to spend time with their families,” Eric Bradley, senior writer at the Port of Long Beach, tells GlobeSt.com. “Any U.S. seaports that trade with nations in East Asia are likely to experience proportional impacts connected to the Lunar New Year celebrations. The Port of Long Beach feels the effects of this on an annual basis because East Asia is our main trading partner. For example, China alone accounts for almost 70% of containerized imports and 40% of exports.”

While Lunar New Year impacts the port activity, the port in general has handled record-breaking volumes throughout 2018, in part because retailers are preparing for new tariffs imposed this year by advance ordering. The activity in January could be a continuation of that trend from late last year. “Retailers plan for the holiday cycle and you do see an increase in cargo activity ahead of Lunar New Year each year,” says Bradley. “It’s difficult to tell how much of our container traffic in January was due to Lunar New Year, considering the ongoing trade dispute.”

This same driver or combination of drivers fueling cargo volumes in January, will likely lead to a decrease in cargo volumes in February. First, Lunar New Year will mean a slowdown in activity from Asia, as expected. “We are expecting a decrease this month due to the holiday, but also because our February 2018 numbers rose an astounding 32.8%,” says Bradley. “The performance helped drive our first quarter 2018 numbers up a record 19.4%.”

If the growth was the result of retailers stocking up in anticipation of tariffs, cargo volumes will drop in February in response—and they could continue to decrease in subsequent months. “Businesses forwarded a lot of their goods throughout 2018 because they were anticipating escalating tariffs,” says Bradley. “That was a boon for us last year, but we believe we’re about to see the effects of that early flow of cargo. Simply put, there is a lot of spring-related inventory already here in the United States.”

Despite some of the impacts from trade conflicts, the Port of Long Beach expects healthy cargo flow of goods coming through the port. “As long as the U.S. economy is growing, we expect our cargo to as well because of the way consumer spending drives economic activity here,” says Bradley. “The U.S. is in the midst of its longest economic expansion on record.”