The Los Angeles and Long Beach seaports are processing an extraordinary number of import containers. Although the three months after the holidays are generally the quietest of the year, this first quarter broke records and that activity points to the tip of the global economic recovery.
The number of import containers processed in March at the Los Angeles seaport increased by more than 120% compared to last March during the economic shutdown.
But even compared to March 2019, which is more representative of a normal month, the number of import containers were 65% higher at both Los Angeles and Long Beach.
The seaports are also processing record numbers of empty containers, which not too long ago were in short supply for Chinese exporters and are necessary for maintaining the Asian supply chain.
Those are positive signs that the initial 2020 supply shock — when China’s shipping shut down at the start of the pandemic — is long gone. And it is another sign that the demand shock that followed is ending and that we can expect increased spending and overall economic activity this year.
The next question is related to the number of ships waiting to be offloaded and if these supply-chain bottlenecks might be the basis for another supply shock and higher prices for the consumer.
According to officials at the Los Angeles seaport, the weekly number of anchored ships is declining, congestion in the terminals is easing and the effort to vaccinate seaport and transport workers is increasing. All of this will help improve the supply chain and the ability to process more containers, according to Phillip Sanfield, the port’s media director.
This leaves the decline of exports as a stumbling block for the world economy, with increased U.S. demand and global vaccinations as prescriptions for growth.
For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.