Welcome to this week’s newsletter, where maritime logistics take center stage. From the escalating conflict in Israel and its surging demand for imports to the activity and shifting volumes at U.S. ports approaching pre-pandemic levels, we've got a whirlwind lined up for you.
Israel’s Conflict and Soaring Demand for Imports
In the wake of an escalating war with Hamas in Gaza and further threats of it spiraling regionally, Israel’s reliance on imports has surged. Many logistics giants have stepped up their operations to meet the nation’s growing needs.
Israel’s Mounting Logistical and Operational Challenges
Israeli ports are under scrutiny amid the country’s escalating war. Although the Port of Haifa and Ben Gurion Airport maintain near-normal operations, they, along with the entire country, face serious logistical challenges. The substantial call-up of army reservists is denting the country's economic stability and self-sufficiency, triggering a sharp increase in import demand for raw materials and consumer goods. This environment has resulted in slower factory outputs and sluggish goods movements at distribution centers. Meanwhile, the Port of Ashdod, despite being operational, is struggling with efficiency due to its proximity to the conflict zone, frequent rocket attack disruptions, and the military call-up of some of its personnel.
Logistics Companies are Stepping Up
DHL Group and Seko Logistics are leading the charge in responding to Israel's soaring import demand. DHL has ramped up its operations, initiating daily freighter flights from Liege Airport to Ben Gurion and regular flights from Leipzig. Seko Logistics is also playing a crucial role, with its 65-strong team in Israel working tirelessly to ensure smooth goods movement. FedEx and other freight operators are back in service, too, highlighting a united front in maintaining Israel's supply chain during these challenging times.
A Close Look at September U.S. Port Volumes
U.S. port volumes are a reliable barometer of the global economy. So, let’s see what insights we can glean from the September figures.
A Nationwide Perspective on Trade
Before we take a closer look at the September volumes for U.S. ports, let’s add some context as to why these latest figures are so important:
- Maritime gateways handled 40% of international freight value in 2022.
- The top 12 U.S. seaports consistently managed around 46 million TEUs from 2018 to 2020.
- There was a dramatic volume surge during 2021 and 2022, with the ports handling over 53 million TEUs. However, this surge resulted in widespread congestion and logistical delays, hindering global trade.
Spotlight on Specific Ports
Containerized trade is gradually returning to pre-pandemic levels, sparking curiosity about its year-end comparison with 2019. Here’s a breakdown of the latest September 2023 figures from key ports:
- Northwest Seaport Alliance: Experienced a 22% year-over-year increase in volumes, although it was still 6% below 2019 levels.
- Port of Los Angeles: Saw a 5% year-over-year growth in September, but the volumes were 3% less than 2019, with the situation compounded by high warehouse inventories.
- Port of Virginia: Faced a 13% decline in volumes during September, yet managed to have total TEUs 12% higher than in 2019.
- Port of Houston: Reported an 8% decrease in cargo volumes for September, but impressively, the port was 29% above 2019 levels.
- Port of Long Beach: Had a record-breaking September, thanks to a ratified labor contract and a surge in demand for holiday goods. Volumes surged 12% year-over-year resulting in volumes 19% higher than in 2019.
- Port of Oakland: Experienced a 7% decline in volumes for September, also noting a decrease from August, and ending up 17% below the 2019 figures.
A Closer Look at the Port of Los Angeles
Let's now zero in on the Port of Los Angeles and its remarkable upswing in container volumes.
A Surge in Exports and Imports
September saw a promising 55% export surge at the Port of Los Angeles, signaling economic growth and a narrowing trade gap, as highlighted by the port’s Executive Director Gene Seroka. He further emphasized how jobs in the export sector tend to offer higher wages than other segments, making this a big deal. The port processed 748,400 TEUs, a 5.4% increase from September 2022. It also saw a 14% year-over-year rise in imports to 392,608 TEUs despite an 18.5% decrease in empty containers to 235,197 TEUs.
Stabilizing Foundations for Future Growth
The ratification of a long-term dockworker contract has stabilized Los Angeles ports, drawing in more cargo and setting the stage for future growth. Port of Long Beach CEO Mario Cordero echoes this sentiment, attributing positive cargo trends to the contract as well. Despite intermittent work stoppages and an 18.6% decrease in processed TEUs from January to September compared to 2022, the outlook remains optimistic. Especially as the retail sector prepares for the holiday season, with Matthew Shay, CEO of the National Retail Federation, anticipating moderate growth and emphasizing value and preparedness to meet consumer demands.
Port of Virginia’s Mixed September Snapshot
Now, look at the mixed September results for the Port of Virginia. Despite a noticeable drop in cargo volumes, it still saw an intriguing rise compared to 2019.
A Dip in Cargo Volumes
The port witnessed a 13% year-over-year decrease in cargo volumes, settling at 270,979 TEUs for September—marking its eighth consecutive month of YoY declines. Loaded imports experienced a 9% decrease, amounting to 130,073 TEUs, while loaded exports dropped by 3% to 81,515 TEUs. Additionally, empty containers significantly plummeted by 30% to 59,391 TEUs.
A Glimmer of Resilience: Rising Above 2019 Levels
Despite recent setbacks, the Port of Virginia maintains a positive outlook. September's total TEUs increased by 12% compared to 2019, showcasing resilience and recovery potential. Loaded imports and exports have risen by 13% and 14%, respectively, since 2019, while even empties, despite this year's sharp decline, remained 8% above 2019 levels. Port officials have attributed these fluctuations to the normalizing of volumes and cargo flows, suggesting an adjustment period rather than a prolonged downturn.
Port of Long Beach Shatters Records and Signals Optimism
Now, we'll wrap up by turning our attention to the Port of Long Beach after it reported its busiest September on record.
A Record-Breaking September
Handling an impressive 829,429 TEUs, the Port of Long Beach experienced an 11.8% increase from the previous September, breaking the record set in September 2020 by 78,849 TEUs. This performance marks the first monthly year-over-year cargo increase in 14 months, signaling a potential end to the import drought and indicating a positive shift in trade dynamics. Imports rose by 19.3% to 408,926 TEUs, while exports declined by 10.3% to 101,248 TEUs. Additionally, empty containers grew by 11.5% year-over-year, reaching 319,255 TEUs.
A Glimpse into the Future: Consumer Confidence and Cargo Volumes
Port of Long Beach CEO Mario Cordero links the port's success to increased consumer confidence and ratifying the International Longshore and Warehouse Union contract, providing stability and reliability for shippers. Although volumes have decreased by 20.7% in the first nine months of 2023 compared to the previous year, the port remains optimistic. With 5,822,666 TEUs moved from January through September, the port is operating at pre-pandemic levels seen in 2019, and it expects a moderate rebound in cargo volume for the remainder of the year.
Transforming Challenges into Opportunities with Vizion
Global trade and logistics are experiencing mixed signals. From Israel's intensifying conflict and logistics snags to U.S. ports ebbing and flowing toward pre-pandemic levels, Vizion stands ready to turn any challenges into opportunities with a comprehensive suite of services:
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- High-Quality Data: Rely on the highest quality data sourced from multiple providers and refreshed multiple times daily to minimize latency.
- Port Performance Monitoring: Keep a pulse on port performance with detailed information on vessel movements and container dwell times.
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