Bloomberg News

Port of Long Beach’s Traffic Declines in ‘Unsettled’ Time

September 02, 2011

(Updates with shipping line comment in 15th paragraph.)

Sept. 2 (Bloomberg) -- Economic forecasters predicting a Christmas sales bump in the U.S. may be disappointed, according to early traffic reports from the nation’s second-busiest port.

Inbound container cargo at California’s Port of Long Beach probably fell again in August after a 1.2 percent drop in July, said Richard Steinke, executive director of the facility.

Retailers are holding back on orders because “there’s still consumer skepticism,” Steinke said yesterday in an interview at Bloomberg News’s Los Angeles office. “Unsettled is probably a good word to describe what’s going on now.”

A slowdown in shipping demand this year forced container lines including A.P. Moeller Maersk A/S, the world’s largest, to delay the introduction of peak-season surcharges on Asia-U.S. routes as they struggled to find enough cargo to fill expanding fleets. The busiest shipping season typically starts in late July or early August and can continue through October.

“This year, July was not good,” Steinke said. “August numbers are not looking good.”

Long Beach and the adjacent Port of Los Angeles are the two largest in the U.S., accounting for 40 percent of the nation’s container shipments, according to Art Wong, a spokesman for the Long Beach port. August figures will be reported around mid- month, he said.

L.A. Decline

In Los Angeles, inbound shipments for July were down 3.17 percent to 357,667 containers. August results will be issued in the next couple of weeks, said Rachel Campbell, a spokeswoman for the port.

The ports’ cargo, half of which comes from China, includes clothing, furniture and toys. “It’s the shopping mall coming in on those ships,” Wong said.

Retailers and manufacturers have cut back on orders after being spooked by the down-to-the-wire federal debt-limit debate last month, according to John Husing, an economist specializing in Southern California.

“What you are seeing are the decisions being made by the supply chain managers and the folks who control inventory,” Husing said in a telephone interview. “What you’re hearing is an abundance of caution.”

Hong Kong-based Orient Overseas (International) Ltd., which operates container vessels and a terminal at Long Beach’s port, anticipates a pick-up as shops leave it late to bring in supplies for the holiday season.

“We expect a year-end rush on cargo,” Stanley Shen, a spokesman, said by phone. The company’s volumes to the U.S. west coast were “flat” in August, with the line using about 85 percent of its capacity, he said.

Increased Bookings

Evergreen Marine Corp., part of Asia’s second-biggest container line, said that a pick-up in demand has enabled operators to levy surcharges. There are also increased forward- bookings industrywide as customers prepare for the holiday season, the Taipei-based company said by e-mail.

Hanjin Shipping Co., which has a Long Beach terminal, said that trans-Pacific volumes rose in August from July.

“Demand for the year-end holiday seasons appear to be holding up,” the Seoul-based shipping line said by e-mail.

The National Retail Federation anticipates a 10 percent jump in inbound container volumes at major U.S. retail ports in September and an 8 percent rise in October. The Washington-based group forecast a 1.6 percent decline for August after demand surged a year earlier on concerns about possible shipping- capacity shortages, according to an Aug. 9 statement.

Long Beach handled 311,240 inbound containers in August 2010, which was the highest tally since October 2007, according to data compiled by Bloomberg. Overall cargo-box traffic jumped 24 percent last year to more than 6.2 million units, while Los Angeles gained 16 percent to 7.8 million.

Long Beach shipments rose 4.7 percent this year through July. Even if that pace continued for the year the port won’t top its 2007 peak of more than 7.3 million containers.

“Obviously the economy is still sputtering,” Steinke said. “And we’re a pretty good barometer of that.”

--With assistance from Kyunghee Park in Seoul and Adela Lin in Taipei. Editors: Anthony Palazzo, Anne Reifenberg

To contact the reporter on this story: Christopher Palmeri in Los Angeles at

To contact the editors responsible for this story: Anthony Palazzo at; Mark Tannenbaum at

The Good Business Issue
blog comments powered by Disqus