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July 2023 Cargo Volumes Drop Across the Board Impacting the Trucking Industry

08/31/2023 20:01

In July 2023, the shipment of cargo freight experienced a significant decline and is currently far from reaching the record-high levels observed in 2022. This is particularly evident at the ports located on the West Coast.

The competition between the Port of Los Angeles and the Port Authority of New York and New Jersey to become the busiest port in the United States has taken an unexpected turn.

This blog post will explore the reasons behind the drop in cargo volumes, the industries most affected, and the implications for the trucking industry as a whole.

What Does the Statistics Say on that Previous Month

The Port of Los Angeles

According to recent statistics, the Port of Los Angeles has experienced a significant decline of 25.8% in comparison to the previous year, handling only 684,290 20-foot-equivalent containers. In contrast, during the same period last year, the port managed to process 935,423 TEUs. This recent development has raised some concerns regarding the future of the port's capability to handle a large volume of goods and maintain its competitive edge in the industry.

According to Gene Seroka, the Executive Director of the Port of Los Angeles, the global trade scenario has witnessed a notable easing due to the high inventory levels of both retailers and manufacturers. Despite this, American consumers are showing no signs of slowing down their spending habits and are expected to come across even more discounted items as we approach the fall fashion and year-end holiday season.

The Port of Long Beach

The twin complexes located in Los Angeles and Long Beach, California have experienced a significant decline in cargo volumes this year. A major contributing factor to this decline is the prolonged contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association.

The sluggish pace of these negotiations has led to uncertainty and delays in port operations. However, there is hope on the horizon as a tentative agreement has been reached and is currently undergoing a ratification vote. Once approved, this agreement is expected to bring stability and renewed confidence to the shipping industry in the region.

The Port of Long Beach has reported a significant decline in container volume, with a 26.4% drop in July compared to the same period last year. This decline saw the port process 578,249 containers, down from 785,843 in the previous year. However, Port of Long Beach CEO Mario Cordero has expressed confidence in the port's ability to rebuild its market share, stating that working with industry partners will help to improve their numbers. In the short term, Cordero anticipates a modest peak season for shipping as consumer spending on back-to-school supplies and holiday gifts is expected to be lower this year. Meanwhile, the Port of Oakland has experienced a boost in container volume, handling 136,181 TEUs in July, a 16.8% increase from the same period in the previous year. This marks the port's highest container volume since October 2022.

The Oakland Port

According to the authorities at the Oakland port, there has been a rise in the number of vessels arriving at the port, and the duration of their stay at the berth has decreased. This indicates that the transportation of goods is operating efficiently.

The Maritime Director of the Port of Oakland, Bryan Brandes, expressed his contentment at the gradual increase in container volumes. The port is making substantial investments in the Oakland Seaport to foster growth, which will ultimately benefit the local economy and create job opportunities.

The latest developments suggest that the proposal to establish a Major League Baseball stadium in the Port of Oakland has been effectively shelved, leading to the eventual relocation of the Oakland Athletics.

The possibility of Major League Baseball coming to the Port of Oakland with a new stadium seems to have dwindled as reports indicate that the plan is all but dead. The Oakland Athletics are now expected to relocate, having hired a general contractor to construct a ballpark on the Las Vegas Strip. Additionally, the lead negotiator for the Howard Terminal project in Oakland has resigned.

The Northwest Seaport Alliance, which manages ports in Seattle and Tacoma, Washington, experienced a decrease in volume by 9.9% in July. The number of containers moved in July was 234,875, which was lower compared to the 260,572 that was recorded in 2022.

The Port of Houston

Port Houston, located along the Gulf of Mexico, experienced a notable increase in volume in July compared to the same period last year. Specifically, the port moved 344,163 TEUs, representing a year-over-year increase of 4.9%. This success can be attributed, in part, to the recent acquisition of three new ship-to-shore cranes.

These cranes will be used to load and unload vessels capable of carrying up to 15,000 TEUs, a type of vessel the port expects to see more of as the Houston Ship Channel undergoes expansion. Specifically, the channel will be widened by 170 feet to reach a new width of 700 feet by next year and deepened to 46.5 feet. These changes will allow for two-way traffic and enable the largest ocean vessels to call on the port with greater efficiency.

The Port of Savannah

The Port of Savannah, Georgia, reached its peak performance in July by processing a total of 447,587 TEUs. However, this number represents a 15.7% decrease compared to its busiest month on record, which was July of last year, when the port processed 530,800 containers.

Despite the current decline, the Port of Savannah is expected to undergo a massive expansion that will enable it to handle up to 10 million containers annually by 2026, placing it on par with other major ports in the US, such as Los Angeles, Long Beach, and the Port Authority of New York-New Jersey.

According to Ed McCarthy, the Chief Operating Officer of the Georgia Ports Authority, the recent addition of an expanded berth and four of the largest ship-to-shore cranes in North America has resulted in a boost in vessel service efficiency and an annual berth capacity increase of 1.5 million TEUs. The Port of Savannah is now capable of accommodating five large ships at once, and has successfully eliminated its previous backlog of vessels.

The South Carolina Port

According to the South Carolina Port Authority, container processing in Charleston and other facilities dropped by 3.7% in July, with 208,134 TEUs processed in comparison to 216,097 the previous year. Despite this slowdown, SC Ports CEO Barbara Melvin assured that the Southeast region is experiencing significant growth and the East Coast port market is still attracting new cargo. These trends reflect the current state of the U.S. economy, which is experiencing some moderation but still showing promising signs in certain areas.

The Port of Virginia

According to recent reports, the Port of Virginia experienced a decline of almost 6%, with a total of 298,202 shipments recorded compared to 317,691 during the same period last year. This significant drop in cargo traffic may have implications for the region's economy and transportation industry. Further analysis and investigation may shed light on the underlying factors contributing to this decline.

The Port of New York

Compared to other ports, The Port Authority of New York-New Jersey has a reporting delay of approximately one month. Recently, the port reported a significant decline in its container volumes for the month of June. The processing of 624,440 TEUs was recorded, indicating a 27.4% drop from the previous year, wherein 859,953 TEUs were handled.

In Conclusion

The trucking industry has faced a significant decrease in cargo volumes during July 2023. This decline has affected all sectors equally, causing a noticeable impact on the industry as a whole. This development is worth noting, as it signifies a shift in the transportation landscape that needs to be addressed.

The decrease in cargo volumes could be attributed to various factors, such as the economy's current state, a shift in consumer behavior, or even the ongoing pandemic. It's crucial for the industry to take note of this trend and adapt accordingly to ensure its sustainability and success.

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