Since the outbreak-driven import boom began three years ago, Southern California warehouses and distribution centers are finally experiencing overcapacity for the first time, but given current market conditions, this year's shipping season is expected to be largely non-existent.
port stakeholders expect continued erratic operating conditions throughout the peak season due to weak cargo volumes. The National Retail Federation said it expects US imports in August-October to be lower than last year, although the year-on-year deficit is expected to end in November.
According to the latest national industrial real estate report from commercial real estate company Cushman & Wakefield (Cushman & Wakefield), the net absorption of the U.S. industrial real estate market in the second quarter was 44.9 million square feet, compared with 71.4 million square feet in the first quarter, and the vacancy rate was 3.5 percent. Vacancy rates at inland facilities, located about 60 miles east of Los Angeles, rose 3.4 percent in the second quarter. While this is lower than the national vacancy rate of 4.1 per cent, it is higher than the 1.9 per cent vacancy rate in the inland areas in the first quarter of this year and the 1 per cent vacancy rate in the fourth quarter of 2022.
Warehouse, distribution and short-haul supplier Performance Team's vice president of technical sales Scott Weiss said that a large amount of available space is concentrated in 3PL, a third-party logistics provider that regularly handles retailers and direct importers for overflow inventory.
import demand remains weak as the sector slowly returns to post-pandemic normalization. Weiss said warehouses operated by retailers, direct importers and third-party logistics companies began reducing inventory about two months ago, leaving room for imports into the ports of Los Angeles and Long Beach.
to cope with what may not be a peak season.
Marine terminal "no problem"
, a key measure of how long containers stay at 12 Los Angeles-Long Beach terminals, showed that trucks left the terminals (mainly to local warehouses) for 2.9 days in June. According to the Pacific Merchant Shipping Association (PMSA), June 2022 is 5.5 days and June 2021 is 4.8 days.
Los Angeles' three terminal operators said that most of the fully loaded imported containers entering the nation's largest port complex have been moving seamlessly to the area's warehouses leaving the terminals largely free of congestion.
No longer causing terminal congestion inbound containers on the entire supply chain has a positive ripple effect, Los Angeles Yusen Terminals President and CEO Alan Michael Alan McCorkle said that warehouse space availability is translating into truck driver queue times and turn times are reduced, and day and night shift truck turn times are improving.
According to the Harbor Trucking Association, the average truck turn time at the Port of Los Angeles-Long Beach in June was 74 minutes, the lowest since December 2022. Ed DeNike, president of SSA Containers, which operates three terminals in Long Beach, said that because the loaded import containers and chassis units do not sit idle in the warehouse yard for days or weeks waiting to be unloaded, the area has ''a large number of chassis, ''reducing the chassis shortages that have plagued Southern California for the past three years.
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