U.S. Container Ports Seeing Impact of China's Coronavirus Slowdown
America's seaports are now beginning to feel the effects of the sailing cancellations that ocean carriers implemented at Chinese ports over the span of the past month. The Port of Long Beach, the second-largest in the United States, is now seeing lower cargo numbers portwide, and its longshore hiring needs have fallen accordingly.
"Our labor levels have not been this slow in about four or five years," deputy executive director Noel Hacegaba told the Long Beach Post. “The uncertainty that was created by the trade war has now shifted to chaos brought on by the coronavirus."
The head of the neighboring Port of Los Angeles, Gene Seroka, told CNBC that Port of LA - the nation's largest container port by TEU - expects a 25 percent fall in volume for February. The Georgia Ports Authority, which handles a fifth of East Coast container volume, expects March traffic to be well below forecast levels.
Most port officials remain optimistic that cargo volume will snap back rapidly once China's factories come back online. Demand for Chinese goods remains strong, and there will almost certainly be a surge in traffic to make up for lost time.
Though any pickup will take several weeks to be felt on the other side of the Pacific, Chinese seaports are already getting back to work, according to data on handling times. The wait time for an outbound box at Zhoushan and other major Chinese container ports is beginning to fall as longshoremen return to work. "We are seeing that port congestion has eased and logistics start to revive,” said Xu Kai of the Shanghai International Shipping Institute (SISI), speaking to Reuters.
Part of the solution lies in enticing Chinese truck drivers back to work; quarantine measures for the corononavirus outbreak have made it difficult (or undesirable) for many Chinese truckers to report for duty, and severe trucking shortages have been reported.
The outbreak in South Korea may be the next concern for American ports. Busan is a major transshipment hub, and the Port of LA's Gene Seroka warned that business disruption from a big outbreak in South Korea could also impact volumes on the U.S. West Coast.