West Coast Ports

Special Report

A few months ago , I wrote about the potential for import volumes destined to inland North American locales to return to West Coast routings . Now , with a couple of months of data under our belts , we can confirm that the move is underway , but only thus far in Southern California and not elsewhere on the US West Coast .

Using the Intermodal Association of North America ( IANA ) ETSO database , we can examine the regional volume trends by equipment type . The first chart examines the intact inter-

Northwest origination IPI lagging North American volumes

Total North American inland point intermodal ( IPI ) vs . US Northwest and Western Canada origin volumes

2019 Average = 100

Outbound Southwest IPI volumes increasing rapidly

Total North American inland point intermodal ( IPI ) vs . US Southwest origin volumes

2019 Average = 100

104 100

90

100 80

70

60

50 Jan L 2022

Jul Jan 2023

Jul Oct , 2023J Jan 2024

Source : IANA ETSO database

100

90 100

78 80

70

COMMENTARY

By Lawrence Gross

North America Northwest Western Canada

North America IPI Southwest IPI

© 2024 S & P Global

L

L modal — also known as inland point intermodal ( IPI ) — volume coming out of the Southwest region ( California , Nevada and Arizona ), and compares it with intact intermodal volume for North America as a whole . Of course , it ’ s a safe bet that any ISO container coming out of the tri-state Southwest region actually originates in California . The chart compares each month to the average month in 2019 , which is set at the index level of 100 .

The chart shows that Southwest region volume generally tracked that of the overall network until the COVID-19 pandemic . During the initial post-pandemic surge beginning in late 2020 , Southwest originating activity clearly outpaced North American IPI .

But in the second quarter of 2021 , congestion and capacity issues began to take their toll , and Southwest volume fell rapidly , plunging well below North American volume and reaching its nadir at the end of 2021 . Volume then began to improve , reaching rough parity with the network in mid-2022 before faltering later in the year and falling well behind once again . The situation remained the same until quite recently .

Intact international containers emerging from the Southwest region increased rapidly from November to December and again in January , moving well above the North American trend . Volume has soared 22 % in just two months . This kind of volatility is difficult to handle , but so far , the participants seem to have been able to accommodate the surge in a smooth manner .

Setting aside the pace of the increase , there should still be some capacity available because volume in January was still 4 % below the average month in 2019 . To reach the peak seen in 2021 would require a 25 % increase from where things stood in January .

However , it is easy to see that we could start to see problems well before that peak is reached again .

But there appears to be a safety valve at hand . Both the Pacific Northwest and Western Canada have not yet seen equivalent volume gains . As shown in the second chart , IPI originations from both the Northwest region ( Washington and Oregon ) and the Western Canada region ( British Columbia , Alberta , Saskatchewan and Manitoba ) remain well below the average monthly activity achieved back in 2019 .

If the Southern California surge continues into the danger zone , then importers might do well to consider taking advantage of these alternative routings . Proactive decisions now may save substantial pain later .

Source : IANA ETSO database © 2024 S & P Global email : lgross @ intermodalindepth . com

32 Journal of Commerce | March 25 , 2024 www . joc . com