Are US Ports Empty and What Impact Does the Tariff Have on Global Shipping?

Summary

The video discusses recent fluctuations in U.S. port traffic, with a focus on the Port of LA and Port of New York and New Jersey. The speaker cautions against overinterpreting year-to-year numbers, as 2021 saw strong growth, followed by declines in 2022 and 2023. Changes in shipping routes and the impact of tariffs on bookings and logistics are highlighted, with a particular focus on the effects of rising tariffs on just-in-time businesses. The video concludes by noting that disruptions in port traffic could have widespread effects across the supply chain, including rail and drayage services.

Takeaways

• 😀 The year-to-year shipping data for major ports, such as LA and New York/New Jersey, shows fluctuating volumes, with some years seeing record highs while others show significant declines.
• 😀 2024 saw a massive spike in container traffic, but caution is needed when interpreting year-to-year changes, as 2023 was a significantly lower year.
• 😀 The Port of New York/New Jersey is seeing a shift in its shipping routes, with more vessels coming directly from Africa instead of through Europe due to geopolitical factors like the Houthi conflict.
• 😀 February 2025 container volumes were up over 9% compared to February 2024, indicating strong front-loading at the start of the year.
• 😀 Caution is advised when reading data on tariff-related disruptions, as some reports only reflect short-term, week-to-week drops rather than long-term trends.
• 😀 Manufacturers and distributors who rely on just-in-time logistics are highly vulnerable to disruptions, especially in light of new tariffs, which could lead to higher costs and potential business closures.
• 😀 A significant portion of businesses may struggle if they cannot stockpile inventory, and this could lead to shortages in goods on shelves in the coming months.
• 😀 Changes in warehousing and logistics management since 2021 have allowed for better storage capabilities across the U.S., reducing reliance solely on West Coast ports.
• 😀 Short-term disruptions in port traffic, especially in LA and Long Beach, could have a ripple effect on other sectors like drayage and rail, which depend on steady shipping volumes.
• 😀 The potential long-term impacts of tariff negotiations and logistics disruptions are still uncertain, and the next few months will reveal whether stockpiling strategies can mitigate damage to businesses.
• 😀 Viewers are encouraged to subscribe, share, and support the channel to stay updated on future videos and discussions about the shipping and logistics industry.

Q & A

What was the trend in container volumes for the Port of Los Angeles (LA) in recent years?

The Port of Los Angeles saw a significant drop in container volumes from 2020 to 2022. However, in 2021, there was a massive spike, making it the port's best year. Despite this, the volumes dropped again in 2022 and 2023, with a major increase expected in 2024.

How should we interpret year-to-year comparisons in shipping data right now?

Year-to-year comparisons in shipping data can be misleading due to unusual trends in recent years. The Port of LA, for example, had an exceptionally good year in 2021, which distorts the perception of the overall trend. It’s important to look at data in context rather than just comparing year-to-year numbers.

What is the significance of the Port of New York and New Jersey in the context of current global shipping patterns?

The Port of New York and New Jersey has seen an increase in shipping traffic, with vessels coming from Africa rather than Europe, which is a shift caused by geopolitical changes, like the Houthi conflict. This is part of a broader change in global shipping routes.

What is the current shipping volume trend at the Port of New York for 2024?

The shipping volume at the Port of New York has seen an increase, with loaded containers up by over 9% in February 2025 compared to February 2024. This indicates a front-loading of shipments in the first quarter of 2025.

Why should we be cautious about interpreting week-to-week booking comparisons?

Week-to-week booking comparisons can be misleading, especially when looking at data from the week prior to and after the initiation of tariffs. Many companies held off on shipping cargo in anticipation of the changes, which can skew the numbers.

How might the new round of tariff negotiations affect shipping volumes?

The outcome of the new round of tariff negotiations will be crucial. If tariffs remain high, manufacturers and distributors who cannot stockpile goods might face significant disruptions, leading to potential business closures and bankruptcies.

What is the impact of the 'just-in-time' logistics model on businesses facing tariff disruptions?

Businesses relying on 'just-in-time' logistics are vulnerable to disruptions because they don’t have large stockpiles of goods. Any unexpected delay or increase in tariff costs will directly affect their ability to meet demand, potentially leading to higher costs and shortages.

How has warehousing and logistics evolved since 2021-2022?

Warehousing and logistics management have become smarter, with better storage strategies now spread across the United States, not just on the West Coast. This evolution helps mitigate some of the supply chain risks caused by disruptions at major ports.

What are the short-term impacts if the Port of LA doesn't see the same business volume in Q2 as in Q1?

If the Port of LA experiences lower business volume in the second quarter, it could have widespread impacts on the supply chain. This includes disruptions in drayage, rail transportation, and other logistics activities, potentially causing delays and cost increases across various industries.

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