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Home Port News Global pandemic besets crucial US ports

Global pandemic besets crucial US ports

Major US ports are facing strong challenges caused by the unprecedented Covid-19 crisis as decreasing demand and cancelled voyages are the most serious obstacles facing the ports.

April’s report from the Northwest Seaport Alliance (NWSA), a marine cargo operating partnership of the Port of Seattle and Port of Tacoma, is maybe the most discouraging case. NWSA saw last month’s container volumes plummeting by 24% compared to the same period of the last year, handling 247,675TEU. Compared to April 2019, full imports declined 13.9% while full exports decreased 17.6%.

NWSA total year-to-date domestic container volumes dipped 2.7%, while Alaska and Hawaii volumes declined 2.5% and 4%, respectively.

“The economic fallout from the Covid-19 pandemic continues to disrupt the global supply chain,” commented NWSA.

During the first four months of 2020, the alliance has handled 1,036,556TEU, which translated to a 17.5% year-on-year drop. “Our gateway experienced a total of 39 void sailings through April, driven by the lingering trade dispute with China and the global Coronavirus pandemic,” explained NWSA.

Economic effects of the virus pandemic are also visible in California with both Long Beach and Los Angeles ports reporting weaker performances compared to the last year, while Oakland’s slight growth comes with big concerns for the future.

Port of Long Beach (POLB) handled 519,730TEU last month, down 17.3% from April 2019, which remains the Port’s busiest April on record. Imports slid 20.2%, exports declined 17.2% and empty containers headed overseas decreased by 12.2%. The Port handled 2,202,650TEU during the first four months of 2020, which is a 9.5% fall from the same period in 2019.

The nation’s second-busiest port is expecting a slow rehabilitation, as everything is gradually returning to normal. “We look forward to a recovery with rebounding cargo shipments as the nation contemplates relaxing shelter-in-place orders, people return to work and consumer demand rises – however it will not be in the short term,” stated Mario Cordero, executive director of the POLB.

On the contrary, California will be forced to face even bigger challenges in the short term, caused by the sailing cancellations. While the San Pedro Bay Port Complex, which is comprised of the port of Los Angeles and the port of Long Beach, has reported only 10 blank sailings from 1 April to 30 June in 2019, it is expected to have 48 cancelled vessel voyages for the same period of 2020.

The figures come on the heels of 61 cancelled sailings for the San Pedro Bay ports during the first quarter of 2020.

Sixteen of these void sailings are scheduled for Long Beach and the other 32 are scheduled for the port of Los Angeles (POLA), which has handled 688,999TEU in the previous month that represents a decrease of 6.45% compared to last April.

POLA executive director, Gene Seroka, is not optimistic for the near future, arguing that “There are at least 28 voided vessel sailings and retailer orders are soft as consumer purchasing and confidence has dropped precipitously.”

Seroka warned, “As we move deeper into the remainder of the second quarter, we’re forecasting significantly lower volumes, particularly on the import side.”

The main problem in Los Angeles is detected in the exports side, which decreased by 16.2% in April, while loaded imports increased by 2.6%. At the same time, empty containers declined by 14.4%.

The third-largest Californian port has reported a slight increase in April, but the downturn forecasts for the upcoming months do not give space for celebrations.

The Port of Oakland has stated that April loaded container volumes increased 1.4% compared to the same month last year, as a combination of exports rising by 3.6% and imports dipping 0.9%.

However, its total cargo volume – imports, exports and empty container shipments – declined 6.5%. The port attributed the decline to a 29% drop in shipments of empty containers back to origin destinations.

Port of Oakland container activity in 2020

Credits: Port of Oakland

Port of Oakland officials expect reduced cargo volumes in the next months because 11% of scheduled Oakland vessel calls in May and June have been cancelled by shipping lines, as the ocean carriers worldwide are scrubbing voyages due to dwindling demand by shippers for vessel space.

“Our April cargo performance was better than expected, but it was most likely a blip resulting from the release of pent-up demand when factories re-opened in China after being quarantined,” the port stated.

“We are faring better than some other ports, but our forecast in the coming months is an overall volume throughput decline of five-to-10%,” it added.

The port said exports leaving Oakland for overseas markets continue to be a bright spot amidst the pandemic, as export volume has increased year-on-year in three of the past four months, according to Port data.

Port of Houston handled 3,910 auto units in April, a decline of 41% less than the same month last year, and 31% less than in the first four months of 2019.

Moving to the 6th largest container port in the United States, the Port of Houston has also suffered from the coronavirus repercussions. The port in Texas has shown a significant year-on-year 12% decline in April when it saw a total of 221,540TEU.

However, for the full year, the port handled 994,627TEU through April, which translates to a 5% increase compared to the first four months of 2019.

“We have had 26 announced blank sailings this year including seven for the month of June. It’s yet to be seen what July will look like but hopefully, we will see some improvement into the summer,” executive director at the Port of Houston, Roger Guenther, said.

“Looking forward, landside and waterside expansion projects have continued uninterrupted. We must ensure that the necessary infrastructure and capacity are in place to help the economy bounce back once this global pandemic has been controlled,” he added.

Antonis Karamalegkos
Editor





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