December 7, 2022

New York Harbor Is the Nation’s No. 1 Mall Again as California Falls

A container crane sits idle at the Port of Los Angeles amid a cargo downturn on November 16, 2022 in Los Angeles, California. The nation’s busiest container port complex, the Ports of Los Angeles and neighboring Long Beach, saw shipping container imports fall 26% in October compared to the same month in 2021.

mario tama | Getty Images News | Getty Images

The Port of New York and New Jersey took the nation’s top spot for trade in October, the third consecutive month it has overtaken major ports in California as more cargo volumes move to the coast is.

New York handled 792,548 twenty-foot equivalent units (TEUs), nearly 19% more than in October 2019.

Earlier this week, the Port of Los Angeles posted its lowest October level since 2009. Port of Los Angeles Executive Director Gene Seroka cited prolonged negotiations and fears of a strike among workers at the port as the reason for the trade change during a press conference. earlier this week. Over the past three months, the Port of LA has also lagged behind the Port of Long Beach.

Logistics officials have been saying for months that trade was being redirected due to labor issues at west coast ports and several transport network links, including railways, have started to use new models to route shipments across the country based on changes in port usage.

The labor situation on the west coast remains uncertain.

While talks between the International Longshore and Warehouse Union and the Pacific Maritime Association are expected to resume as soon as this week, the resumption offers little clarity on the status of the negotiations, according to analysis provided to CNBC by a door. -word of the supply chain research company. Everstream Analytics. He warns that despite the start of talks in May 2022, the two sides seem further than ever from reaching an agreement.

ILWU-affiliated workers have suffered two walkouts at the Port of Oakland since early November, moves the Everstream spokesperson says are widely seen as tactics to pressure the PMA into moving forward in the negotiations.

Despite declining West Coast cargo volumes, Everstream says industrial action at the ports of Oakland and Seattle has reduced productivity, leading carriers to divert volumes to Canadian West Coast ports .

“There are two fundamental reasons for the record number of boxes handled by the Port of New York/New Jersey,” said Josh Brazil, vice president of supply chain insights for Project44, which tracks containers. “First, shippers are still avoiding the West Coast to mitigate the risk of strikes in Los Angeles and Long Beach. Second, European imports to the East Coast are also very high.”

According to data from Project44, the total capacity of TEU vessels deployed from Europe to the East Coast is up 15.5% compared to October 2021.

Ship freight expectations fall as economy and consumers weaken

Even as the East Coast emerges as a port competitor, it is not immune to a slowing global economy and a weaker consumer. CNBC’s supply chain heatmap vendors warned this summer and fall of a drop in manufacturing orders that impacted shipment volumes. Lesser container volumes are now seen off East Coast ports, including New York and New Jersey.

With the holiday season fast approaching, Alex Charvalias, MarineTraffic’s supply chain in-transit visibility manager, said the Port of New York is facing record average wait times for capacity. containers “outside the port limits”. Its data shows that number has dropped since week 42, when it was 84,694 TEUs, to 28,340 TEUs in week 45.

Rick Cotton, executive director of the Port of New York and New Jersey, told CNBC that early ocean bookings for the port in November show “some easing,” but he added that it appears “seasonal; not surprising. We expect to maintain our high volumes on a comparative basis and we don’t see anything that would change that.”

The Port of Savannah, which also carried record volumes, is seeing fewer ships waiting, with 17 ships waiting an average of 2.9 days this week.

The Port of Houston has 14 ships off the port waiting 4.9 days.

Falling orders have led to increased sailing cancellations and problems for US exports with fewer ships arriving at domestic ports.

Another factor is the redirection of maritime trade to the east coast and the increased use of rail to move maritime goods west.

“We are having difficulty with exports going to west coast ports from the east by rail,” said Paul Brashier, vice president, drayage and intermodal at ITS Logistics. “These challenges are high container dwell time and volumes in storage. Containers miss originating ships and roll to the next ship. Increased rail transit times and limited number of ships calling in west coast ports due to lower volumes due to potential social unrest is the biggest contributing factor to the volume of extended stay containers,” he said.

The CNBC Heat M Supply Chainap the data providers are the artificial intelligence and predictive analysis company Everstream Analytics; the global freight booking platform Freightos, creator of the Freightos Baltic Dry Index; the logistics provider OL USA; the FreightWaves supply chain intelligence platform; the Blume Global supply chain platform; third-party logistics provider Orient Star Group; global marine analytics provider Marine traffic; marine visibility data company Project44; shipping data company MDS Transmodal UK; Ocean and Air Freight Rate Market Benchmarking and Analytics Platform Xeneta; leading research and analytics provider Sea-Intelligence ApS; worldwide crane logistics; DHL Global Forwarding; freight logistics provider Seko Logistics; Planet, provider of daily satellite imagery and global geospatial solutions, and ITS Logistics provides port and rail drayage services at 22 coastal ports and 30 railroad ramps across North America.