As US importers liquidate and destroy unsold goods, ports eye shipping turnaround
17/03/2023 19:09
By Lisa Baertlein
LOS ANGELES, March 16 (Reuters) - The leader of the
busiest U.S. seaport on Friday said February's cargo volume hit
the lowest level since the start of the pandemic as inflation
and economic upheaval hurt demand, and signaled that activity
may not pick up until the second half of this year.
"This is a global phenomenon. We may not be at the height of
the pandemic, but there are more container vessels sitting idle
around the world today than at any time since it began," Port of
Los Angeles Executive Director Gene Seroka said on Friday.
He and other ocean shipping experts say a turnaround won't
come until retailers and other cargo owners clear clogged U.S.
warehouses to make room for new shipments.
Executives at Walmart WMT.N , the largest U.S. importer of
containerized goods, say they have made progress clearing unsold
goods. Nevertheless, they remain cautious about consumer
spending as inflation gobbles up money otherwise spent on goods,
and recession and other "unknowns" threaten.
Meanwhile, importers are selling products for pennies on the
dollar to liquidators or offering steep discounts in customer
email blasts. Still others have thrown up their hands.
Bobblehead maker Funko FNKO.O earlier this month said it
was destroying $30 million to $36 million of toy products from
its overstuffed distribution center in Arizona.
The Port of Los Angeles handled 331,811 20-foot
(6-meter)equivalent units (TEU) of goods in February, a 36%
year-over-year drop led by plummeting imports.
Seroka expects first-quarter volumes to be down roughly 33%
from last year and about 20% below the five-year average before
starting to improve in the third quarter.
"How much (improvement) remains to be seen," said Seroka,
who added that ongoing West Coast port labor talks are also
weighing on results.
(Reporting by Lisa Baertlein;
Editing by Sandra Maler)
((lisa.baertlein@thomsonreuters.com; +1 310-491-7241; Reuters
Messaging: lisa.baertlein.thomsonreuters.com@reuters.net))