By Lisa Bartlein
LOS ANGELES, March 16 (Reuters) – The head of the busiest US seaport said on Friday February freight volumes hit their lowest level since the pandemic began as inflation and economic upheaval weighed on demand, signaling that the Activity may not pick up again until the second half of this year.
“It’s a global phenomenon. We may not be at the peak of the pandemic, but there are more idle container ships around the world today than ever before,” Port of Los Angeles executive director Gene Seroka said Friday.
He and other shipping experts say a turnaround won’t come until retailers and other cargo owners clear congested US warehouses to make room for new shipments.
Executives at Walmart, the largest US importer of containerized goods, say they have made progress clearing unsold goods. Still, they remain cautious on consumer spending as inflation eats away at money that would otherwise be spent on goods and the loom of a recession and other ‘unknowns’.
Meanwhile, importers sell products to bankruptcy trustees for pennies on the dollar or offer steep discounts in customer email blasts. Still others threw up their hands.
Bobblehead maker Funko announced earlier this month that it was destroying $30 million to $36 million worth of toy products at its crowded Arizona distribution center.
The Port of Los Angeles handled 487,846 20-foot (6-meter) units (TEU) of goods in February, down 43% year-on-year due to a slump in imports.
Seroka expects first-quarter volume to come in about 33% year over year and about 20% below its five-year average before improving in the third quarter.
“How much (improvement) remains to be seen,” Seroka said, adding that ongoing talks over West Coast port work are also weighing on the results.
(Reporting by Lisa Baertlein; Editing by Sandra Maler)
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