© 2020 Arizent. All rights reserved.

Virus disruptions may cause 20% cargo decline at U.S. ports

Register now

The coronavirus has cut deeply into the volume of cargo crossing the docks at U.S. seaports in a further sign of the economic turmoil caused by the outbreak.

First-quarter cargo volume at U.S. seaports will be down as much as 20% from the prior-year period due to the coronavirus, according to an estimate from the American Association of Port Authorities, a Washington, D.C.-trade association representing public port facilities.

Cary Davis, the group’s director of government relations, said a key contributor to the estimate are canceled sailings to and from parts of Asia where the impacts of the coronavirus have been most severe.

Every port is situated differently, but “looking port-by-port, we either see that they’re unaffected or down drastically,” Davis said. He also cautioned actual cargo volumes could turn out differently, such as if canceled sailings could be reinstated as supply chains recover.

The slowdown highlights the broad economic turmoil caused by the virus that has roiled global financial markets as the pathogen has spread from China to every populated continent, with more than 90,000 confirmed cases globally. And for now, ports on both sides of the U.S. are feeling the brunt of the virus, or expect to soon.

“I think it’s potentially an important indicator of the scope of the impact of the virus on the economy,” said Joshua Meltzer, a senior fellow at the Brookings Institution. “I would expect it to bounce back. It depends on how long this virus goes on.”

The Port of Los Angeles, the largest U.S. container port, saw cargo volumes fall roughly 25% in February compared to the prior year, the authority has said.

Executive Director Gene Seroka said that could drag the total container volume in the first quarter down 15% from a year ago. China accounts for about half of the Los Angeles port’s inbound and outbound cargo traffic.

“That’s a pretty tough start to the year, and we think that is mostly attributable to the coronavirus,” Seroka said in a Feb. 24 interview.

From Feb. 11 to April 1, there are about 80 canceled sailings of container ships to the U.S., half of which were scheduled to come through the Los Angeles port, Seroka said.

The Port of Baltimore reduced operating hours at its container terminal starting March 2 “based on the prolonged Chinese Lunar New Year events,” according to a statement posted on the Ports America Chesapeake’s website, which operates terminals at the port. The cutback was reported earlier by the Baltimore Sun.

The South Carolina Ports Authority, which operates the Port of Charleston, anticipates container volume will decline 15% to 20% in March and April compared to its business plan, authority president Jim Newsome said in a statement.

“The impact is largely dependent on when workers can return to the factories after being quarantined,” he said. “We anticipate a rebound in volumes in May and June to finish the year above plan, barring any unforeseen worsening of the situation.”

The Trump administration’s travel restrictions targeting China have put mariners on alert, as well. The U.S. Coast Guard in early February announced that ships carrying passengers who’ve been to mainland China in the prior two weeks will be denied entry to the U.S. Other vessels with healthy crew members who’ve been to China in that time can enter the country but will be mostly required to remain on board.

Bloomberg News
Shipping container ABS Coronavirus