The US-China tariff back-and-forth hasn’t dampened cargo volume growth at the Port of Oakland, with the port on track for its third straight year of record container volume in 2018, but supply chain experts have questioned how long this will last.
At the quarterly meeting of the port’s Efficiency Task Force, some 40 trade and transportation executives ranging from longshore labour representatives to cargo owners gathered to discuss trade dynamics, with the consensus being that while cargo volume is spiking right now, it could drop by January.
“We’re peaking,” said a major US West Coast freight forwarder, “but it may not go on much longer.”
Other trends noted by Task Force members assembled in Oakland were that warehouses are filling up as US retailers import merchandise from Asia, shipping lines have added more than 30 extra voyages to regularly scheduled transpacific services to transport larger container volumes, and that ports up and down the West Coast have reported unprecedented cargo volume growth since mid-summer.
Reasons for the cargo spike vary, according to shipping experts, ranging from a continued strong US economy to the fact that this is also peak season when importers order heavily for holiday merchandising, while a third explanation was frontloading – shippers accelerating orders to beat the imposition of new tariffs on Chinese imports.
“Imports are a good story, but the reason for the growth is still something of a mystery,” said Port of Oakland maritime director John Driscoll. “We suspect frontloading is part of the answer.”
More than one official predicted declining January imports as new US-imposed tariffs take effect, while others said import volumes should keep climbing until then.
Oakland said its import volume is up 2.7 per cent over 2017 which was a record year for containerised cargo at the port. Imports from China have increased 5 per cent this year, the port said, despite the tariff skirmish.
Oakland exports to China have declined 33 per cent in 2018, attributed to tough new Chinese restrictions on wastepaper shipments, an Oakland export staple.
As Oakland's China exports decline, other Asian nations are picking up the slack, the port said. Export shipments to Vietnam soared 96 per cent in September, while exports to Taiwan increased 37 per cent.
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