Import Forecast and Current Trends

Gene Seroka, the Executive Director of the Port of Los Angeles, delivered a stark projection during a recent update for the Board of Harbor Commissioners, forecasting a 35% drop in cargo arrivals over the next two weeks. This decline is attributed mainly to a halt in shipments from China to major U.S. retailers and a softer influx from Southeast Asia.

According to data from Wabtec Corp., a notable decrease will commence next week when 17 vessels are scheduled to deliver approximately 85,486 twenty-foot equivalent units (TEUs) of goods. This represents a decrease of 28.6% compared to the current week and a drop of 10.5% year-over-year. The following week is set to see similar declines, with another 16 vessels expected to bring in around 74,925 TEUs—down nearly 33% from the previous year.

Impact of Tariffs on Demand

The steep import downturn follows a high-volume period where retailers sought to stockpile goods ahead of anticipated tariffs. Seroka linked the existing 145% tariff rate on Chinese goods and the 10% tariffs impacting nearly all countries to reduced demand among U.S. retailers and manufacturers.

Despite President Trump’s announcement on April 9 regarding a 90-day pause on reciprocal tariffs, Seroka emphasized the limited timeframe for businesses to adapt their procurement and sourcing strategies. “Many major retailers have told us they’ve got about a six-to-eight-week supply of inventory in their systems now that will quickly dry up,” he noted, highlighting the tough choices ahead for both U.S. consumers and manufacturers if policy shifts do not occur.

Export Challenges and Broader Economic Concerns

Seroka indicated that exports are likely to face even greater challenges. In March, the Port recorded a movement of 123,000 TEUs, reflecting a 15% decrease from the previous year—marking four consecutive months of declining figures compared to the same period last year. He pointed out that retaliatory tariffs are particularly impacting sectors such as agriculture and heavy manufacturing.

He cited a record monthly purchase of soybeans by China from Brazil in March, attributing this to favorable exchange rates and the absence of tariff barriers influencing procurement strategies.

Employment and Industry Impact

While Seroka does not anticipate “mass layoffs,” he acknowledged potential changes in employment patterns at the Port. Truckers currently transporting four or five containers may soon only handle two to three, and dock workers who rely on overtime could see their hours reduced, impacting casual workers the most.

These assessments align with a report from the Los Angeles County Economic Development Corporation, which underscores the risks posed by tariffs to Southern California’s vital trade and logistics sector—an industry that generated nearly $300 billion in direct economic output and contributed roughly $93.3 billion in tax revenue in 2022. This sector supports around 2 million jobs, employing over 900,000 workers with an average salary exceeding $90,000.

Retailer Responses and Future Outlook

Leading executives from major retailers such as Walmart, Amazon, and Home Depot recently met with officials at the White House to express their concerns regarding the tariffs. Analyst Carol Schleif of BMO Private Wealth remarked that while there may be room for tariff negotiations, port activity suggests companies are already cautious about inventory ahead of the critical holiday shopping season. “I’m hearing anecdotal evidence that some smaller and mid-sized retailers flat out can’t afford it,” she noted, further illustrating the potential ramifications of ongoing trade tensions.