With nerves fraying about upcoming talks between waterfront employers and the International Longshore and Warehouse Union, with memories fresh of jurisdictional issues that have led to sporadic protests in the Pacific Northwest and with chassis shortages causing long delays at Los Angeles-Long Beach, West Coast ports are as exposed as they’ve been in recent memory.
Trans-Pacific cargo is the backbone of the U.S. container trade, particularly at West Coast ports, and when that backbone weakens, as it did in 2002’s 10-day lockout, cargo owners don’t hesitate — any more, at least — in seeking routing alternatives.
So, if a Plan B becomes necessary, just how much is at risk in the trans-Pacific container trade, and who would be affected most?
In 2013, almost 13.5 million loaded 20-foot-equivalent container units, including cargo transshipments to non-Asian countries, moved between the U.S. West Coast and Asian ports. The overall trade was up 2.1 percent year-over-year and surpassed the pre-recession year of 2008 by 2.6 percent.
U.S. Pacific Southwest ports, primarily Los Angeles-Long Beach, held 74.1 percent of the trade at nearly 10 million TEUs. Volume at the nation’s largest port complex was up 3.3 percent year-over-year and 2.6 percent from 2008. Northern California’s ports, primarily Oakland, saw volume increase 9.4 percent year-over-year and 10.4 percent from 2008, to 1.3 million TEUs. That was good for a 9.4 percent share of the trade.
In contrast, Pacific Northwest ports, while holding a 16.5 percent share of the trade, saw volume drop 4.2 percent year-over-year to 2.2 million TEUs, and cargo is still 1.3 percent below 2008.
Mainland China continues to be the driving force in the trade, accounting for 7.9 million TEUs in 2013. Imports from mainland China — which represented 66.6 percent of the 8.9 million TEUs that moved between the West Coast and Asian ports in 2013 — increased 3.2 percent year-over-year. Exports to mainland China — which represented 41.7 percent of the 4.5 million-TEU market — spiked 10.6 percent year-over-year to nearly 6 million TEUs. Interestingly, mainland China’s market share on the U.S. import side was flat from 2012, despite conventional wisdom that some manufacturing is leaving the country as wages rise and production shifts inland, away from China’s coastal regions.
Capitalizing on whatever sourcing is shifting out of mainland China was Vietnam, whose exports through U.S. West Coast ports surged 9.6 percent year-over-year. U.S. exports to Vietnam, meanwhile, increased 5.6 percent. Vung Tau, the southern Vietnamese hub port, has experienced an eightfold increase in volumes shipped to U.S. West Coast ports since debuting in the trade in 2009. U.S. West Coast exports from the port jumped 11.4 percent alone in 2013, to 167,160 TEUs.
In all, U.S. containerized trade with Asian countries reached nearly 20 million TEUs in 2013. Imports totaled 13.1 million TEUs and exports, 6.9 million, with each segment growing 3 percent year-over-year. Compared with pre-recession 2008, total U.S.-Asia containerized trade rose 7.4 percent, led by 13.5 percent growth in exports. Imports, meanwhile, have increased 4.4 percent since 2008.
Los Angeles-Long Beach, the main gateway for U.S. trade with Asian countries, held a 49.4 percent share of the trade in 2013 — 7 million TEUs in imports and 2.9 million in exports. Although impressive, LA-Long Beach’s market share has actually dropped since pre-recession 2008 when the two ports held 51.5 percent of the trade — 54.3 percent of the imports and 45.8 percent of exports. Long reliant on imports, LA-Long Beach’s cargo mix in 2013 was 71 percent imports, exceeding the 65.6 percent share that imports hold in total trade in the lane.
While LA-Long Beach rules the Northeast and Southeast Asia trade, New York-New Jersey ranks first in the Indian subcontinent market. In 2013, the Indian subcontinent held 6.6 percent of the U.S.-Asia export market and 5.3 percent of Asia-U.S. imports.
Southeast Asia was the best performing region in this trade, with U.S. imports rising 5.1 percent and U.S. exports increasing 3.6 percent year-over-year. Southeast Asia held 14.2 percent of the U.S. export market and 13.2 percent of the import market. U.S. exports to Vietnam led the region with 11 percent year-over-year growth while U.S. imports from Vietnam increased 9.9 percent.
Northeast Asia cargo in 2013 increased 3.2 percent year-over-year, while U.S. imports rose 2.7 percent. Northeast Asia held a 79.1 percent share of all U.S. exports to Asian countries, 44.2 percent of which went to mainland China. Similarly, Northeast Asia countries held a dominant 81.5 percent of the U.S. import market, with 64.7 percent from mainland China.
It’s crunch time, what’s your plan?