Ports in Los Angeles and Long Beach warns shipping volumes from Asia could fall even further

Ports in Los Angeles and Long Beach said declining cargo volumes in the coming months could be even more severe in February if the 2019 Corona disease (COVID-19) spread more widely in Asia.

"This is a serious problem," an unnamed port operator told JOC.com. In recent days, dialogues with shipping lines on the impact of the epidemic have shown a sense of widespread gloom and resignation.

The two ports officially forecast container volumes to fall by 12 to 15 percent in the first quarter as shipping lines continue to cancel trips across the Pacific due to the spread of Corona virus in China and South Korea.

Gene Seroka, managing director of the Port of Los Angeles, the volume is expected to fall 25% in February and 15% in the first quarter. As of March, he predicts about 40 trains will be canceled on the transpacific. Noel Hacegaba - deputy chief executive and chief executive said, Long Beach expects volume to decrease by 6% in February and 12% in the quarter. China and South Korea are two of the port's largest trading partners.

Port operators in the largest port complex in the US also expressed concern about the rise of empty containers. With about 1.8 billion square feet of industrial and distribution area throughout southern California, warehouses have emptied their inventory over the past month and returned empty containers to ports, but with dozens of The train was canceled, resulting in insufficient room to transport all of the empty containers back to Asia. "We are starting to face the backlog of empty containers," said Daniel Bergman, vice president of Total Terminals International in Long Beach. So far, shipping lines have not announced any port calls to transport empty containers back to Asia.

Usually, empty containers will be placed at US ports when shipping lines are forced to cancel trips due to weakening demand for exports from Asia, such as after the Chinese New Year. In the past years, however, cancellations have lasted only two or three weeks before resuming regular scheduled weekly services. This year alone, it is not possible to say in advance when weekly services will resume operation.

The Corona epidemic cancels at least 20 more sailings

Shipping lines in January announced the cancellation of 60 trips to North America in February due to factory shutdowns during the Chinese New Year. Since then, they have announced more than 20 cancellations in April due to the Corona virus.

Ed DeNike, president of SSA Container, said that the ports of SSA Marine in Seattle and Long Beach were severely affected by the decline in volume, but the international container port in Oakland was not affected much. He also agrees with the port operator's views on the backlog of empty containers in Southern California.

Port operators are expecting a sharp increase in imports, usually after Asian plants return to full production after the Chinese New Year, but Sean Pierce, president and CEO of Fenix ​​Marine Services , said it is still too early to tell when this sharp increase will take place due to the impact of the Corona virus.

Even if factories in China are fully operational this spring, it's not sure how strong the US economy will be. "There is a strong need to stimulate shipping volumes," Pierce said. At the beginning of the year, economists had forecast a GDP growth of about 2.1% this year, mainly due to the stronger second half of the year, but that was before the Corona virus was raging.

Phaata (Source: JOC)

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