Holiday goods have arrived and the immediate outlook at the Port of Los Angeles is healthy, with record cargo still coming in, POLA Executive Director Gene Seroka said at his monthly virtual news briefing on Friday, Oct. 18.
Seroka reported that the Port of Los Angeles saw a “record September and all-time best quarter.”
The cargo numbers were provided during the hourlong session that also featured National Retail Federation CEO Matt Shay.
The news follows the earlier report from the neighboring Port of Long Beach, where cargo also hit record-breaking numbers in September.
“October is shaping up to be another strong month here in the Port of Los Angeles,” Seroka said.
While the West Coast ports weathered some concerns and minor impacts from an initial three-day walkout by longshore labor on the East and Gulf coasts before a key wage agreement was reached, there is still more uncertainty to come: There now is an extended deadline coming up in mid-January as negotiators try to arrive at complicated agreements on automation and other issues.
“We certainly don’t want to see this (uncertainty) continue into next year,” Shay said.
The Port of Los Angeles saw a record 954,706 twenty-foot equivalent units (or TEUs, the industry measurement for cargo volumes) in September, Seroka said.
That was a 27% increase over the same month the previous year.
It also was a record-breaking quarter for the port that saw 2,854,904 TEUs come through the docks in the past three months.
And nine months into 2024, the port is “18% ahead of its 2023 pace,” port officials said.
When it comes to holiday shopping, retailers should be in very good shape, Shay said.
“Most holiday merchandise is already here,” Shay said, adding that a “robust” rest of 2024 for consumer spending is expected. Holiday sales are expected to be up this year by between 2.5% and 3.5%, he added.
Some modest slowdown at the end of this year could still be seen, however, and the first of the year can be expected to experience the usual downturns due to the lunar new year and production slowing down in Asia, Shay said.
“February is historically the slowest month of our year but we feel good about the goods that are in place for the holiday season,” Shay said, adding that the resilience of consumers has been strong.
Retailers already are planning for the spring season, Shay said, though with an eye on potential challenges in the new year with regard to East Coast negotiations and possible new tariffs.
Asked about current overall trends, Shay said the National Retail Federation is tracking a greater emphasis on holiday shopping, noting the pandemic seems to have given new importance to holiday decorating and celebrations.
“It was one way families could maintain some normalcy, celebrating the holidays,” Shay said about the impact the pandemic had on retail. “Halloween (now) is even a bigger season than before; people go out of their way to celebrate. The end-of-the-year holidays are something families save for all year long.”
A number of lessons for the port were learned during the pandemic years, Seroka said, prompting the port to fine tune its in-house data monitoring systems that help the port see “around corners and over hills” in planning for cargo that will be arriving and hitting the docks.
“We’ve moved more cargo between June and September than in our historic peak in 2021, and more cargo this peak (pre-holiday) season than ever before — and with no (ship) backups,” Seroka said, alluding to the large ship backups outside the harbor a few years ago.
Both Seroka and Shay, though, expressed concerns about the possibility of higher tariffs, saying more cargo could also come in late this year to avoid those changes should they come with a new administration in January.
“A tariff is a tax on whomever imports the goods, not on the importing country,” Shay said. “So if a tariff is paid by an importer or retailer, frequently that’s going to be passed on to consumers so it’s ultimately a user tariff” and not a tax on a foreign country.
Short-term, strategic tariffs, he added, are helpful as a temporary tool in guiding trade policy; but long-term tariffs, he said, “don’t make any sense and clearly are paid by consumers (in higher prices).”
The business and retail sector, Shay said, will also keep a close eye in 2025 on corporate tax policies.
“The 2017 Tax Act that reduced corporate taxes from 35% to 21% brought corporate tax rates more in line” with other developed countries, Shay said. “That made us more competitive and also allowed retailers to reinvest in their businesses instead of sending an additional 14% to the federal government.”
Preserving those tax cuts, Shay said, “will be a big priority for us in 2025, regardless of who wins the White House.”
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