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Port of Los Angeles Sees Potential Import Surge Ahead of Aug. 1 Tariff Deadline

The Port of Los Angeles could experience one last import surge ahead of the Aug. 1 deadline for the White House's potential rate increases on its reciprocal tariffs, port Executive Director Gene Seroka said during the port's monthly cargo briefing.

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Importers may be "doing as much as they can to sneak in under that new August 1 deadline," Seroka said during the July 14 briefing. The port is expecting to handle about 950,000 twenty-foot equivalent units in July.

Loaded imports at the port totaled 470,450 TEUs in June, 10% higher year-over-year and 32% higher than May, when tariffs put pressure on import volumes.

The port handled 892,340 TEUs in June, which is 8% higher year-over-year, according to a port release. The port noted that this past June "was the busiest June" in the port's 117-year history.

Contributing to the increase in inbound cargo in June were five unscheduled vessels, known as extra loaders, that arrived at the port later in the month, according to Seroka. In July, the port is expecting seven extra loaders to arrive, he said.

Even loaded exports grew in June after experiencing six straight months of declines. Loaded exports totaled 126,144 TEUs in June, up 3% year-over-year. However, "there's a concern among American outbound shippers that we'll start to see more reciprocal tariffs on U.S. goods, which could further impact our export volume to the downside," Seroka said.

June and July have become peak season months for Los Angeles, as retailers and manufacturers brought in orders earlier than usual to get ahead of trade uncertainties, according to Seroka. They have also been running various simulations that consider when and where to buy from as part of their hedging strategy, he said.

While the port has less exposure to higher tariffs on Europe, the cumulative effect of the EU tariffs and the tariffs on Canada, Mexico and China are creating a "whipsaw effect," where people are grappling with the unpredictable nature of the tariffs and making different decisions than those that they had planned, Seroka said.

Should the Aug. 1 tariff negotiation deadline remain in place, port volume could ease, Seroka said, adding that the National Retail Federation forecasted a double-digit percentage drop in cargo volume from August through November.

The NRF said last week that major U.S. ports could see monthly volumes drop by 10.4% year-over-year in August, 19.9% in September, 19.2% in October and 21.3% in November. The NRF noted that port volumes in the second half of 2024 were elevated because of concerns about East Coast and Gulf Coast strikes.

Some importers also may have begun pulling inventory forward last summer as President Donald Trump addressed trade and tariffs in his reelection campaign, according to Seroka.

"The year-end holiday cargo order should already be in Asia, and what's going to be on its way is what we're going to get for that all-important holiday season. It's too late to try to negotiate orders at this point in time for that year-end product," Seroka said. He also said earlier in the briefing that "retailers are unlikely to order high volume speculatively and risk deep discounts after the holiday season later this year. For us consumers, lower inventory levels, fewer selections and higher prices are likely."

Joining Seroka during the media briefing was Bobby Djavaheri, president of Yedi Houseware, an importer of small houseware electric appliances and dinnerware. Djavaheri said the tariffs have caused his company to more closely scrutinize the types of products it imports.

"We have, carefully, and are carefully picking and choosing what SKUs [stock keeping units] to bring in that we could turn at a better pace," Djavaheri said. "For example, the small electric business is a very, very cutthroat business: very small margins, higher ticket prices. So, those are going to be probably halved in imports, or maybe even more than half. So, that business is going to suffer. The dinnerware business probably would be down 20%, 30%, but we're talking about imports here."

While Djavaheri's company didn't pay tariffs on one or two of its top SKUs because he imported them ahead of the tariffs, "we have a hundred other SKUs that were impacted by tariffs. And trust me, the amount of tariffs paid is way more than 10 years of what this company has ever paid."

Seroka also said other companies, such as manufacturers in Detroit whom he visited in June, have indicated that their tiered suppliers "are bringing in just a base level of parts and components. They're not building up stock or inventory."

For the 2024 fiscal year, which the Port of L.A. said ended for it on June 30, the port handled 10.5 million TEUs, which is 14% higher than the 9.2 million TEUs handled in FY 2023.

Seroka also was asked about U.S. fees on China-built vessels slated to begin Oct. 14 (see 2506100023).

These fees could translate to an additional $100 to $300 per container, and "every indication I have ... is that those additional costs will be passed on to the importer of record," Seroka said. Ocean carriers may also seek to shift China-built vessels away from the trans-Pacific routes and use vessels built in other nations instead, he said.