Stocked Retailer Inventories Result in First Cargo Volume Decrease Since 2020

Translations Blog

Matt Dolly

March 25, 2024

Retailers stocked up on products following the goods buying frenzy during 2020 and 2021, resulting in severely inflated cargo volumes at the top U.S. shipping ports in the following years. As lockdowns were lifted and consumers shifted to spending on services, retailers remained flush with products and the need for “just-in-case” inventory subsided. Much of 2023 was spent trying to unload excess supply from stores and warehouses. Additionally, the growth in U.S. trade with Mexico and less dependency on China resulted in an increase in products transported by truck or rail. As a result, the top U.S. ports recorded an annual decrease in total cargo volume for the first time since 2020. However, shipping totals were still high enough to exceed more normalized, pre-pandemic 2019 levels, boosted by a resilient consumer.

Total container volume for the top 10 studied ports fell by 12.8% in 2023 when compared to 2022, as all ten ports logged lower totals with eight recoding double-digit percentage losses. However, cargo outpaced pre-pandemic 2019 levels, albeit slightly, with six of 10 ports recording higher totals. West Coast ports took the biggest hit, down a composite 14.5% YoY and 7.0% when compared to 2019 as the shipping shift that began during the second half of 2022 continued into the early part of 2023. However, the figures are an improvement from mid-year 2023 when West Coast volumes were down 23.6% and 9.8%, respectively. East and Gulf Coast cargo totals recorded an 11.3% YoY drop in 2023 but volume was 8.4% higher than 2019. The East and Gulf Coast handled nearly 53% of the U.S. trade in 2023, down slightly from 54% in 2022. As a point of reference, the ratio between East/Gulf Coast and West Coast cargo volumes was virtually 50-50 in 2019.

PORT HIGHLIGHTS
(Ranked by total cargo volume in calendar year 2023)

1st	Following a 7.2% drop in in 2022, cargo volume at Port Los Angeles fell 12.9% during 2023, and was one of four of the top 10 ports to record lower shipping totals than pre-pandemic 2019 levels. However, despite the decrease, the YoY loss was an improvement from the pace set at mid-year 2023 when the port’s volume was down 23.6%.
2nd	The Port of Long Beach suffered a 12.2% decrease in cargo 2023. However, volume was 5.1% higher than pre-pandemic levels, the only West Coast port to record an increase when compared to 2019. Despite the loss in 2023, Long Beach reclaimed its spot as the 2^nd busiest shipping port in the U.S. Similar to neighboring Los Angeles, the YoY loss was an improvement from the pace set during the first six months of 2023, cutting its losses in half as the port’s volume was down 25.5% at mid-year.
3rd	After six consecutive record-setting years, the Port of New York/New Jersey experienced a loss of 17.7% in 2023, the largest drop of all East Coast ports. The decrease resulted in the Port dropping back to No. 3 in the rankings. However, cargo volume remained 4.5% higher than 2019 totals.
4th	The Port of Savannah suffered its first loss in seven years in 2023, as volume dropped 16.4%, falling below five million TEUs for the first time since 2020. Totals were still 7.1% better than 2019, the second highest increase among ports on the East Coast.
5th	Following double-digit percentage gains during the past two years, cargo volume fell by 3.8% at the Port of Houston, the smallest loss in 2023. The largest Gulf Coast shipping port is far and away the fastest growing in the U.S. during the past four years, posting a 27.9% gain vs 2019.
6th	After breaking cargo records in consecutive years, shipping totals fell 11.2% at The Port of Virginia in 2023. However, overall volume was 11.9% higher when compared to 2019, the highest increase among East Coast ports.
7th	The Port of Seattle and Tacoma recorded a cargo loss for the second consecutive year in 2023, falling 12.1%. It was the third loss in the past four years and volumes were 21.2% lower than 2019 totals, the largest drop among the top 10 U.S. ports.
8th	Following consecutive record-breaking years, cargo volumes cooled at The Port of Charleston in 2023, falling 11.1%. The Port maintained a slight gain vs. 2019 shipping totals.
9th	The combination of Port Miami and Port Everglades experienced a loss of 8.4% in 2023. While it was the smallest decrease among East Coast ports, South Florida was the only area on the eastern seaboard to experience a loss in cargo volume when compared to 2019, albeit slightly.
10th	Shipping cargo volumes at Port of Oakland decreased for the fifth consecutive year, experiencing an 11.6% decrease in 2022. Totals have fallen 18.9% during the stretch, including a drop of 17.4% since 2019.

While the percentage of product that passed through West Coast ports declined over the past few years, quantities improved during the final few months of 2023 as cargo began to shift back to the Pacific Seaboard. A new labor union contract for West Coast longshore and warehouse workers was finalized in August, while the Panama Canal suffered a severe drought, hindering the transportation of ships to the East Coast. Additionally, tensions in the Red Sea caused ships to divert away from the Suez Canal, sending more cargo to West Coast ports.

Shipping volumes are anticipated to increase as we navigate through 2024, despite an expected reduction in consumer spending, as retailers begin to restock diminishing inventory levels. A return to pandemic-level cargo volume is highly unlikely, while in addition to decreasing disposable income levels, more companies are onshoring manufacturing, or reshoring to Mexico, where an increasing share of freight movement will travel via ground. Looking ahead, in the same way that the industrial real estate sector is taking advantage of a pause in activity by preparing for the next wave of demand, U.S. ports are undergoing a massive amount of infrastructure investments to help accelerate the flow of goods while readying themselves for future supply chain challenges.

Matt Dolly

Research Director - Research Services

Orlando, Florida

(973) 947-9244