Port of Los Angeles broke a century-old record as tariff threats triggered import surge

The July container volumes for the Port of Los Angeles tell the tale of the Trump tariff impacts.

The front-loading of Chinese goods ahead of the tariff deadline pushed container volumes at the Port of Los Angeles to levels it has never seen in its 117-year history. The port processed 1,019,837 twenty-foot equivalent units, or TEUs, in July. Imports came in at 543,728,000 TEUs, also a record.

“Shippers have been frontloading their cargo for months to get ahead of tariffs and recent activity at America’s top port really tells that story,” said Port of Los Angeles Executive Director Gene Seroka. “Port terminals in July were jam-packed with ships loaded with cargo — processed without any delay, much to the credit of our dedicated longshore workers, terminal and rail operators, truckers and supply chain partners.”

But the level of tariffs, at a minimum of 30%, didn’t allow companies to import in full orders, according to Mike Short, president of global forwarding at C.H. Robinson.

“This year’s peak season started about two to three months earlier than normal,” said Short. “We started to see it slow down a month or two before it would normally end, which just started.”

He added: “We have been in peak season for at least three to four months at this point. It’s not as strong as we would normally see.”

The Trump administration announced its initial tariffs on April 2, but then extended deadlines to allow time for further negotiations, first to July 9 and then to Aug. 1. Another reprieve for high tariffs on Chinese goods was granted on Monday, and will expire in mid-November.

According to Short, retail is the No. 1 area experiencing a pullback. Lower-cost items are another area, while the sectors that have continued to be healthier were the higher-value tech and health-care items, Short said.

Trucking and rail companies make their money moving the containers. Less volume means less projected revenue.

In an advisory note to clients, HLS Group wrote, the average spot freight rates from Shanghai to the U.S. have dropped almost 60% from the peak in early June.

“However, the dramatic spot rate decline has slowed in August due to stronger capacity management by carriers, although it seems limited and not enough to stop the downward market. September might be the busiest time for the rest of the year, with increasing demand for the holiday season, which will push up spot rates,” said the advisory.

Alan Baer, CEO of OL USA, told CNBC the lack of any real peak season provides clear insight into the overall impact of tariffs. 

“Ocean spot rates follow volume, up or down, and volume follows consumer behavior coupled with risk-averse behavior by importers,” said Baer. “Small- to medium-sized importers are being hurt as tariff levels remove some, if not all, of their gross margins.”

Using trade data from Panjiva, CNBC saw July exports included refrigerators from Samsung, housewares from Walmart, numerous containers filled with Christmas and Halloween items for Home Depot, backpacks from Capri’s Michael Kors, and furniture from IKEA and Bob’s Discount Furniture.