The port complex of Los Angeles and Long Beach will move unprecedented amounts of cargo in 2022, supported by a resilient consumer, according to the chiefs of the maritime hubs.
Executive director of the Port of Los Angeles Gene Seroka said in an interview on Wednesday that he think records will be set again this year, although a softening for the import side will be seen. He cited a slowdown from the pandemic-driven boom in consumer durable goods, such as household appliances -- “but I’m still confident we’ll come out on the plus side.”
Americans are sitting on about $1.2 trillion in savings, and people are still buying “through the inflation,” while retail sales have continued to grow, said Seroka.
A record-setting 10.7 million 20-foot equivalent units (TEUs) were handled at the port of Los Angeles in 2021, up 16% from 2020. Already in the first quarter of this year, container volumes at the LA port were up 3.5% compared with a year earlier.
The neighbouring port of Long Beach also set a record last year, processing 9.38 million TEUs, a 16% increase from a year earlier, driven mostly by a surge in imports. Cargo moved last month reached an all-time high for the month of March, climbing to 863,156 TEUs, rounding out a record quarter with a 3.6% volume increase.
“We may be superseding what we moved here in 2021 -- maybe not by much, but I still think in terms of the metric of volumes I think we’re going to be in that positive percentile,” said Port of Long Beach chief Mario Cordero in a separate interview at his headquarters.
The southern California port complex, which handles about 40% of container cargo coming to the U.S., has been ground zero for the supply-chain crisis, although those pressures have been easing in recent weeks. As of late Wednesday, the number of container carriers in the official queue to enter the twin ports totaled 46, down from a peak of almost 110 in January, according to the Marine Exchange of Southern California.
There are some signs of storm clouds gathering over the world economy. This month, the International Monetary Fund and World Bank lowered their 2022 global growth forecasts, while Deutsche Bank AG said it’s likely the U.S. will sink into a significant recession by next year. Some of the challenges range from the ongoing war in Ukraine, to Covid-19 outbreaks in China, as well as the Federal Reserve’s aggressive policy-tightening plans.
The U.S. economy shrank last quarter for the first time since 2020, reflecting an import surge tied to solid consumer demand, according to a Commerce Department report on Thursday.