Over the quarter, imports are up (note: the chart below only includes imports, as they have the most relevance for industrial space in Southern California).
Since last Quarter: Imports Increased 10.5%.
Since last Year: Imports Decreased 21%
Imports are almost always going to be higher in the second quarter over the first quarter, because Q2 is the start of the “Peak Season”, where Christmas goods start to push up imports into LA/LB.
This quarter, imports totaled 1.4 million TEU’s, around the same level seen in 2001. Things are going to stay ugly as far as imports are concerned for the rest of 2009. Christmas ordering is over, and there will not be a surprise flood of goods since it has already been planned.
From Journal Of Commerce:
“It’s protection for both sides,” Lau saidCarriers cannot hope for a rush of last-minute orders placed with factories in Asia to rescue them this peak season. Apparel, an important peak-season cargo, has a long lead time because of the piece-work involved in the manufacturing process. Orders for clothes to be sold during the holidays were finalized weeks ago. In fact, apparel retailers are preparing to place their orders for next spring.
Retailers had until early July to place their final orders for toys and electronics, but no surprising mass orders materialized there, either. Shipping patterns for the summer-fall peak shipping season have therefore been set. Carriers did not experience a large shift in market share because every price move in the eastbound Pacific was matched by other carriers.
Although retailers and larger shippers were conservative this year in making volume commitments, they also demonstrated their loyalty to carriers by sticking with them, sometimes in the form of multiyear contracts.
So what to expect in the next 6 months? Imports will rise as should activity, but do not count on an economic recovery as a Christmas present.
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