\n
![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/08\/GettyImages-2159098637-e1723996619541.jpg?w=2048\")
<\/p>\n [ad_1]
\n<\/p>\n
The busiest port complex in the US is churning through import volumes near the highs set during the pandemic despite worries about a cooling economy.<\/p>\n
The ports of Los Angeles and Long Beach, which account for roughly a third of all US container imports, had their third-strongest month ever in July, just shy of an all-time high reached in May 2021. Back then, a wave of\u00a0inbound consumer goods<\/a>\u00a0caused supply bottlenecks on land and a queue of cargo ships waiting for a berth offshore was getting longer by the day.<\/p>\n Demand now is driven by retailers and other importers that are stocking up ahead of\u00a0US tariffs<\/a>\u00a0on Chinese goods and a possible strike by a large group of American dockworkers \u2014 adding to the usual frenzy of pre-holiday ordering that occurs this time of year.<\/p>\n The marine terminals in Southern California\u2019s San Pedro Bay are withstanding the crush so far, though some gauges of capacity constraints are starting to rise.<\/p>\n \u201cWe\u2019re in a strong position heading into the peak shipping season as consumers purchase back-to-school supplies and shippers move goods ahead of potential tariff increases,\u201d Port of Long Beach CEO Mario Cordero said in a statement. \u201cWe have plenty of capacity across our terminals and cargo continues to move efficiently and sustainably.\u201d<\/p>\n In the latest rush to restock, fear of delayed shipments is a big factor.<\/p>\n Talks between the union representing longshoremen on the East and Gulf coasts and their employers have reached an impasse, six weeks before their contract expires Sept. 30. So some ocean freight that might come through ports from Boston to Houston is shifting to West Coast gateways until that uncertainty is resolved.<\/p>\n According to\u00a0data<\/a>\u00a0from Sea-Intelligence, a Copenhagen-based maritime data and advisory firm, every one day of a strike would take about five days for ports to clear the resulting cargo backlog. A one-week strike starting Oct. 1, for instance, would take until mid-November to work through.<\/p>\n \u201cIf we get a two-week strike, then realistically, the ports would not be back to normal operations until we are into 2025,\u201d Sea-Intelligence CEO Alan Murphy said in a research note released last week.<\/p>\n Companies are also racing to beat the imposition of more tariffs on Chinese goods and, in the event Donald Trump returns to the presidency next year, he fulfills a campaign pledge to step up the trade war with China and raise tariffs on all US imports.<\/p>\n According to\u00a0data<\/a>\u00a0released this month by the National Retail Federation and Hackett Associates, US container imports through major ports this year will reach 24.9 million measured in 20-foot equivalent units, up 12% from last year and close to 2021 and 2022 levels that topped 25 million.\u00a0<\/p>\n LA-Long Beach and other West Coast ports have been losing market share to their eastern rivals for years. Hackett Associates Founder Ben Hackett said fresh worries about labor disruptions at eastern ports has pushed the West Coast\u2019s share of cargo \u201cabove 50% for the first time in over three years.\u201d<\/p>\n Such factors are distorting the demand picture, making it hard to know whether peak shipping season started early and trade volumes will level off soon, or if importers will continue bringing in more than usual.<\/p>\n There\u2019s also the chance that consumers\u2019 ability to continue spending bottoms out, leaving warehouses full and companies with too much inventory.<\/p>\n The\u00a0latest retail sales<\/a>\u00a0report reflects consumer resilience despite higher borrowing costs, a cooling labor market, and an economic outlook clouded by wars and the US presidential election in November.<\/p>\n But with pandemic savings now largely gone and wage growth cooling, many Americans are increasingly resorting to credit cards and other loans to support their purchases.<\/p>\n Walmart<\/a> Inc.\u2019s\u00a0latest earnings report<\/a>\u00a0underscores how US households are becoming more cost-conscious in light of economic uncertainty and high interest rates. Americans are also pulling back on travel, while deferring big home renovations.<\/p>\n \u201cWe are seeing that the consumer continues to be discerning, choiceful, value-seeking\u201d and focusing on essentials, Chief Financial Officer John David Rainey said in an interview Thursday.<\/p>\n Home Depot<\/a> Inc. and Whirlpool<\/a> Corp. cut their sales forecasts for the year as their shoppers held back spending on big-ticket items and home improvement projects.\u00a0<\/p>\n So far, though, a consumption slowdown isn\u2019t visible in the industry that moves 80% of global merchandise trade. Asked whether he sees a recession on the horizon, the chief executive of the world\u2019s No. 5 container carrier said not according to his bookings.<\/p>\n \u201cAll of us were surprised by the strong demand that we\u2019ve seen since the first of May,\u201d Rolf Habben Jansen, CEO of the German container carrier Hapag-Lloyd<\/a> AG, said in an interview with Bloomberg Television last week. \u201cThat\u2019s actually still continuing well into the third quarter.\u201d<\/p>\n At the Port of LA, preliminary August figures show sustained momentum. Executive Director Gene Seroka said nearly all indicators of port efficiency are at or better than they were when the surge started, though \u201crecently we\u2019re seeing some micro issues.\u201d<\/p>\n Dwell time for containers \u2014 a measure of how smoothly they\u2019re moving through the port \u2014 has moved up, reaching more than six days. \u201cThat\u2019s far too high, it needs to be between two and four days,\u201d Seroka said.<\/p>\n Strains are also starting to appear in truck chassis availability \u2014 an issue blamed for the severe delays at LA-Long Beach during the Covid bottlenecks of 2021 and 2022.<\/p>\n Still, he doesn\u2019t see anything that\u2019s a cause for alarm. \u201cWe\u2019ve been clipping out the last three months at really high productivity\u201d Seroka said.<\/p>\n He said some industry observers believe that US imports may have peaked in July, a hypothesis that matches up with a\u00a0recent decline<\/a>\u00a0in spot shipping rates.<\/p>\n \u201cWe\u2019ll see if that holds true,\u201d Seroka said. \u201cSo much of it depends on the economy.\u201d<\/p>\n<\/div>\nCautious Consumers<\/h3>\n