2023 import volumes fail to rebound to 2022 and 2021 levels at the Ports of Los Angeles and Long Beach. Will November and December be any better?
Long Beach, California - Despite strong and steady consumer spending throughout 2023, the catalyst needed to bring back optimism and life to the Southern California drayage industry has been absent, and more than likely, will not arrive. October import volumes released by both the Ports of Los Angeles and Long Beach show a decline compared to the month prior.
Locked-in expenses for yard leases, equipment costs, and labor costs secured during the pandemic have saddled many drayage companies with unsustainable debt levels that could lead to many exiting from the industry in 2024 if volume and rates fail to increase or stay steady, especially after Chinese New Year in 2024.
Despite a healthy rebound in loaded imports in September, combined October loaded import containers handled at the Ports of Los Angeles and Long Beach declined by 65,779 TEUs (8%) in October to 735,755 TEUS.
According to statistics published by the Port of Los Angeles, there are 14,357 trucks in service as of September 2023 at the port. By dividing the number of loaded imports TEUs moved monthly by the number of trucks in service, we can get an idea of the decline of containers available to be moved per in-service drayage truck per month and its impact on drayage companies' long-term sustainability and profitability.
As of October 2023, a monthly daily average of 47 loaded import containers were available to be moved per drayage truck in service, compared to a monthly average of 54 loaded import containers in 2022, and a monthly average of 59 loaded import containers per truck in 2021.
However, by digging deeper into the numbers, by August of 2022, the monthly loaded import containers available to be moved per drayage truck declined substantially compared to months prior.
July 2022 was the last time 60 or more loaded import containers were available to be moved per drayage truck monthly. The traditional peak holiday shipping season never arrived in 2022, with November 2022 – January 2023 averaging only 42 loaded import TEUs available monthly per drayage truck, or about 2 containers per day.
Time will tell if November and December of 2023 will bring higher import volumes and holiday cheer to the drayage industry. As January 2024 approaches, new challenges await, such as the eventual transition to zero-emission drayage truck technologies. Read part 1 and part 2.
