Most U.S. imports come from Asia, so the West Coast is the most logical destination. But more businesses have been opting for lengthier routes to the East and Gulf Coasts instead to avoid the West Coast’s inefficiency and congestion.
West Coast ports only accounted for 45 percent of all U.S. imports in August, which is the lowest level since the early 1980s, according to FreightWaves’ Greg Miller. West Coast ports handled 54 percent of U.S. imports in February 2021.
Imports overall still remain high, Miller writes. An 11.5 percent year-over-year decline of imports arriving on the West Coast was accompanied by a 12 percent year-over-year increase in imports arriving on the East and Gulf Coasts. “Import gains were driven by Savannah, Georgia (up 20.4% y/y), Houston (up 12.7%), Norfolk, Virginia (up 11.4%), and New York/New Jersey (up 10.5%),” he writes. The Port of Los Angeles saw a 17 percent year-over-year decline.
That means the massive line of ships waiting to unload at Los Angeles is no more. But roughly the same number of ships are waiting offshore, spread out over multiple ports:
Including all three coasts, there was a peak of just over 150 container ships waiting off North America in January — mostly off the West Coast — and a similar number in late July, this time mostly off the East and Gulf coasts. . . .
Savannah was down from its peak but still had the largest queue, with 29 ships waiting. Houston has not improved, with 23 container vessels still offshore. The other recent hot spot — New York/New Jersey — was down to 13 ships on Thursday morning; it had recently been in the 20s. Meanwhile, the queue off Virginia — composed of ships waiting to get into Norfolk or Baltimore — had worsened and was up to 13 ships.
There were only six ships waiting off Los Angeles/Long Beach, the lowest numbers since Oct. 22, 2020. Altogether, only 22% of waiting vessels were off the West Coast on Thursday morning, highlighting the extent shipping lines have shifted to the other coasts.
Shippers have increasingly good reasons to avoid California. Aside from the labor disputes that could result in a strike at any moment on the entire West Coast, the state is phasing out diesel trucks, banning one of the most common trucking business models, and failing at basic law enforcement around rail lines. Meanwhile, East and Gulf Coast ports, not bogged down by environmental laws like California’s, have been expanding their facilities to accommodate more freight.
Markets are finding a way around California’s bad policies to ensure Americans continue to have access to products. That’s good news — but it’s still no excuse for California’s errors.