Report: San Pedro Bay Port Complex Spurring Industrial Activity in SoCal Market

San Pedro Port Complex, Port of Los Angeles, Port of Long Beach, JLL, International Longshore and Warehouse Union, Pacific Maritime Association
Courtesy of Sven Piper

By Jack Stubbs

The San Pedro Bay Port Complex – comprising the Los Angeles and Long Beach ports – is one of the largest drivers of activity in the nation’s, and perhaps the world’s, industrial market. JLL recently released its “San Pedro Bay Port Complex – July 2023 Port Update,” which provides an overview of recent activity in the San Pedro Bay Port Complex. 

“The San Pedro Bay Port industrial complex drives the market for us…I think 45 percent of the freight that comes into the U.S. comes through that port,” said Danny Raeume, executive vice president at National 3PL Practice Group and SoCal Division co-lead at JLL.

According to its website, the Port of Los Angeles encompasses 7,500 acres of land and water along 43 miles of waterfront. The Port of Los Angeles has ranked as the number one container port in the United States each year since 2000. In 2022, the port moved 9.9 million Twenty-Foot Equivalent Units (TEUs), retaining its top rank among U.S. ports with the second busiest calendar year on record.

The Port of Long Beach is the premier U.S. gateway for trans-Pacific trade and a leader in goods movement, safety, environmental stewardship and sustainability, according to the Port’s website, and handles trade valued at $200 billion annually and supports 2.6 million jobs across the nation.

“The reason the San Pedro Bay Port plays such a huge role in the market is because we get 20 to 22 million TEUs a year through that port, mainly because of China which drives the TEUs from an import perspective,” added Raeume. “Typically, when our port, and thus the industrial market, is doing very well because buildings are full, it’s because of that port. It’s the quickest and cheapest time from China…it’s where product is pushed to the Western U.S. through the SoCal industrial network.”

According to JLL’s “July 2023 – Port Update” report, the twin ports processed a total of 1.43 million TEUs – which are an approximate measure of cargo capacity used for container ships and container ports – in June, marking a seven percent dip below the spring peak in May. The Port of Los Angeles recorded its busiest month in almost a year, only five percent off last June’s all-time high and eclipsing the five-year average by six percent.

Conversely, the Port of Long Beach fell 21 percent month-over-month, most likely hitting its first annual peak one month earlier than Los Angeles. Loaded imports through San Pedro Bay were tallied at 709,632 TEUs and followed a similar pattern. 

Cargo through both ports is expected to show decreases in July, and nine sailings had already been canceled by the start of the Port of LA’s monthly cargo briefing mid-month, the report states.

In spite of the historical success that the San Pedro Bay Port Complex has played in the U.S. industrial market, recent developments add an air of uncertainty to its continued success.

In June, the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) entered into a tentative agreement that could yet have potential knock-on effects for the San Pedro Bay Port industrial complex.

“The recent tentative agreement a few months ago between the ILWU and PMA is absolutely massive for West Coast ports,” explained Raeume. “The biggest sticking point was around automation and operational efficiencies at the Port. Since August 2022, we have started losing about 15 to 16 percent TEUs to the East and Gulf coast ports.”

In spite of the recent developments between ILWU and PMA, the San Pedro Bay Port outperformed others from a national perspective. The San Pedro Port Complex accounted for 49 percent of loaded imports across the five major port complexes, according to JLL’s report, the other of which include Northwest Seaport Alliance (NWSA) and ports in Newark, Savannah and Houston.