The Port of Los Angeles may see a lull in container volumes this coming February as a result of an extended Chinese New Year holiday break for 2022, according to Ocean Network Express’ Jeremy Nixon.
Asian factories are expected to close for up to five weeks in early January this year — instead of the typical two weeks of annual closure — because the week-long holiday will start on the unusually early date of 21 January, the chief executive said.
“We’re upwards taking two weeks for the vessels to come across from Asia into Los Angeles, so we are going to expect actually quite a slow February, March, April because it looks like most of the factories in China and Vietnam are going to take quite a long break this year,” he said on Wednesday as a guest on the Port of Los Angeles’ monthly press conference.
“The factories will start to close down around about the 7th of January and probably going to run through till about the 6th of February, so we’ll get a low-range shadow afterwards because it will take time to get that production back up and running.”
Nixon said container volumes into the US port should pick up in late April due to seasonality, but they will fall well short of volumes achieved in 2021 and part of 2022 as a result of consumer demand for containerised goods.
The port handled 639,344 teus in November, down 21% from the same month in 2021.
“It doesn’t surprise me that at the moment we’re seeing negative growth rates between 15% and 20% compared with last year because we must remember that last year was 15 to 20% up on on the previous year, which was a normal year,” he said.
Transpacific China-to-US spot rates have pretty much bottomed out over the past two weeks as a result of the much lower container volumes to the Port of Los Angeles, Nixon added.
“I would expect that to continue for a while into 2023,” he said.
“Then let’s see whether demand starts to push back up around April-May time, but I think we’re effectively at the bottom now on those spot market rates.”
Spot freight rates from China to the US West Coast came in at $1,403 per 40-foot equivalent unit (feu) on Wednesday, down from $14,924 per feu a year ago.
