California’s ports risk losing market share in wake of COVID-19
By Patrick Burnson, Executive Editor ·
May 12, 2020
As the California Governor’s Task Force on Business and Jobs Recovery begins to address the state’s economic recovery, transport industry leaders are urging its members to also consider the economic and job challenges facing its ports.
“California was suffering a well-documented loss of port market share prior to the COVID-19 crisis,” say Shawn Yadon, Chief Executive Officer for the California Trucking Association and John McLaurin is the President of Pacific Merchant Shipping Association. In an op/ed published in the website Fox & Hounds Daily, they note that California ports need to be included in the recovery assistance funding.
“With the major reduction of retail items and other products, ports and the goods movement industry are facing major financial impacts, no different than airlines and other transportation industries,” they say.
Further evidence of Golden State port decline surfaced today when California’s third largest ocean cargo gateway forecasted a likely downturn in container throughput ahead.
While the Port of Oakland’s loaded container volume edged up last month, spokesmen said that the coronavirus pandemic continues to pressure global trade.
The port reported that April loaded container volume increased 1.4 percent compared to the same month last year. Export loads rose 3.6 percent, the port said, while imports dipped 0.9 percent.
The outlook in coming months is for reduced cargo volume, the port added. That’s because 11 percent of scheduled Oakland vessel calls in May and June have been canceled by shipping lines. Ocean carriers worldwide are scrubbing voyages due to dwindling demand by shippers for vessel space. The culprit: a global economic downturn resulting from the pandemic.
“Our April cargo performance was better than expected, but it was most likely a blip resulting from the release of pent-up demand when factories re-opened in China after being quarantined,” the port said in a statement. “We’re faring better than some other ports, but our forecast in the coming months is overall volume throughput decline of 5-to-10 percent.”
The port said exports leaving Oakland for overseas markets continue to be a bright spot midst the pandemic. Export volume has increased year-over-year in three of the past four months, according to Port data. The port said growth in exports to Southeast Asian markets has offset shrinking trade with China. It said Asian demand is strongest for U.S. farm goods.
The port said its total cargo volume – imports, exports and empty container shipments – declined 6.5 percent last month. It attributed the decline to a 29 percent drop in shipments of empty containers back to origin destinations.
The state’s two mega-ports of Los Angeles and Long Beach reported similar declines, with executives sharing concern about losing market share to other U.S. ocean cargo gateways.
May 12, 2020
About the Author
Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]
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