Cargo forecast: Slowing economy expected to moderate port traffic in 2019

A slowing domestic economy will result in a moderate uptick in container imports through 2019 following last year's record-high cargo growth, according to experts at the Port of Long Beach's 15th annual Pulse of Ports Peak Season Forecast held earlier this week.

About 500 people attended the event, which brought together speakers from all segments of the shipping and goods movement industry to discuss the cargo outlook for 2019, the latest economic trends and their impact on the San Pedro Bay port complex.

North American imports are projected to grow a modest 1.8 percent this year, which is down from the 6.1 percent increase reported for U.S. imports in 2018, according to Melissa Peralta, senior economist and forecaster for Chicago-based rail-car supplier TTX Co.

Imports will be further affected in the second half of 2019 in response to a "sluggish" U.S. economy as the initial effects of the federal Tax Cuts and Jobs Act of 2017 start to fade, she told the crowd, according to a press release issued by the Port of Long Beach.

"Economic fundamentals should continue to be supportive into 2019, albeit at a moderating pace,” said Peralta. "But imports may struggle to keep pace with overall economic growth due to an overhang of freight delivered in late 2018."

Long Beach and other West Coast ports might benefit from the International Maritime Organization’s requirement that container ships reduce the sulfur content of vessel fuel from 3.5 percent to 0.5 percent starting on Jan. 1, 2020, she added.

Although Asian imports have steadily climbed over the past decade at East Coast ports, Peralta said that increased costs associated with the new fuel regulations could drive shippers back to shorter routes leading to West Coast ports, Peralta said.

A webcast of the Pulse of Ports event is available on the Port of Long Beach website.