LA projects 10pc cargo drop due to tariffs - for now

 The Port of Los Angeles predicts 10 per cent cargo volume decline as the impact of higher tariffs hits imports and exports, the port's executive director Eugene Seroka told the American Journal of Transportation.

"The ripple effect of these tariffs will be felt by all of us, and there is no way around that," he said.

"The latest announcement also included a 145 per cent duty on all goods made in China, which represents about 40 per cent of the imports that pass through Los Angeles," he said.

Additional uncertainty comes from the imposition of higher US tariffs on Chinese goods that will have a major impact on the port's container volumes:

Mr Seroka said the initial downturn was not serous because volumes had been unusually high in 2024 due to fears of a dock strike on the east and Gulf coasts, plus the closure of the Suez Canal due to the Mideast conflict and a fall in Panama transits due to low water levels.

Even so, he predicts 12 blank sailings in May. "What I did hear is that some globally famous brands have hit the pause button on shipments out of China for the next couple of weeks and maybe beyond. "I am going to get a pretty good eight-week rolling forecast from some of these locations that will give us a closer beat to what is happening on the booking side. And as you know, an importer in the United States may turn in their purchase order to the manufacturer three, four months before a ship even leaves Asia."

Mr Seroka highlighted the impact that higher import prices would have on the cost of people rebuilding their homes after the catastrophic fires that hit Los Angeles in January.

"Following the fires, the price of softwood lumber, appliances, electronics, furniture, and metal products, copper, steel, aluminium, all went through the roof.

And while some people were talking about this 90-day reprieve, the costs out of every country except for China, are 10 per cent more expensive than they were. So we have 50,000 people without homes today because of those fires," he said..

That is 50,000 that are desperately trying to rebuild their homes, communities, and businesses in these areas. We have got to get to the doing and these cost increases are not helpful."

In March, the Port of Los Angeles processed 778,020 TEU. "That is a five per cent increase over last year, and four per cent above our all-important five-year average for the month of March.

On the bright side, Mr Seroka noted that there had been a significant reduction in rail delays moving containers off the port's docks to US inland destinations.

"We have seen a significant reduction in rail dwell times. In fact, there are currently around 900 containers on our docks waiting more than nine days to be loaded onto rail cars. That is a big decrease from the 6,000 that we saw just last month."