Container Ship Operators Are on a Tear as Freight Rates Skyrocket
For the past 20 years, the Port of Los Angeles has been the busiest seaport in the Western Hemisphere, responsible for exporting commodities such as soybeans and raw cotton and importing everything from furniture to electronics. In 2020, container volume reached 9.2 million 20-foot equivalent units (TEUs), with total cargo handled valued at $259 billion.
Last month, the Port of L.A. saw an incredible 47% increase in container traffic compared to February 2020, representing the strongest February in its 114-year history. The port processed nearly 800,000 TEUs during the month, marking the seventh straight month of year-over-year growth.
Granted, last February was near the beginning of the lockdown in China, America’s biggest trading partner. Growth was therefore all but guaranteed a year later.
But I believe something much larger is happening here. L.A.’s phenomenal surge isn’t a one-off event. We’re seeing a massive, synchronized explosion in global trade as economies reopen and fiscal stimulus measures ignite consumption.
Here are just a couple more examples of what I’m talking about: On the East Coast, the Port of New York and New Jersey saw not only double-digit container traffic growth in January compared to last year but also its highest January on record for volume. In China, volume at major Chinese ports were up 14.5% in the first half of March versus the same period last year.