Picture this: Dozens of massive container ships, like steel behemoths, queuing in the Pacific Ocean, anxiously waiting to unload their cargo at congested ports. Could this scene from the pandemic-era backlog at Los Angeles and Long Beach ports repeat itself? As US-China trade relations undergo subtle shifts and tariff policies adjust, the trans-Pacific shipping market is buzzing with renewed activity. But will this trigger another round of port congestion crises?
Capacity Surge: Trans-Pacific Shipping Market Heats Up
Since the May 14 announcement of a 90-day tariff suspension, market analysts have predicted a surge in Chinese exports to the United States. Seizing this opportunity, major shipping lines have scrambled to restart or add new routes, bringing previously idled vessels back into service. The result? A dramatic increase in trans-Pacific shipping capacity.
While estimates vary slightly between agencies, eeSea data shows Asia-to-North America capacity reaching approximately 2.4 million TEUs (twenty-foot equivalent units) in June—a 400,000 TEU increase from May. More strikingly, July's capacity is projected to climb to 2.8 million TEU, marking another 400,000 TEU jump.
The capacity expansion concentrates primarily on West Coast routes, particularly the Southwest region encompassing the Los Angeles and Long Beach port complex. In contrast, East Coast routes show more modest growth. Sea-Intelligence's weekly report indicates June's Asia-to-West Coast capacity grew 17% year-over-year, with July projected at 19%. East Coast routes saw 7% June growth, though July plans suggest a potential 19% increase—though actual figures remain to be seen.
LA/Long Beach Ports: Can They Handle the Surge?
The critical question: Can these ports process this sudden influx without repeating pandemic-era gridlock?
Los Angeles Port's latest forecasts show volumes crossing the 100,000 TEU weekly threshold by June's second week, with steady increases through the third week. Long Beach mirrors this trend, rebounding to 90,000+ TEU weekly volumes in June's third week, projected to approach 100,000 TEU by early July.
With numerous ad-hoc West Coast sailings and new routes scheduled for late June/early July arrivals, port volumes will likely remain elevated. But does this guarantee congestion?
Historical Benchmarks: Peak Handling Capacity
Historical data reveals the ports' maximum throughput: 2021 saw nearly 10 million TEU annual imports from Asia at LA/Long Beach, dipping to 9 million TEU in 2022. Los Angeles Port's monthly record—approximately 520,000 TEU—occurred in May 2021, with Long Beach hitting 400,000 TEU that same month.
While these figures demonstrate peak capacity, current circumstances differ significantly from 2021's unique pandemic-driven disruptions.
The Deciding Factor: Capacity Utilization vs. Demand
The pivotal question: Will June's expanded capacity actually fill? Industry voices offer mixed perspectives. Shipping executives and port officials suggest the 90-day tariff pause may not spark a pandemic-level rush. Several factors temper expectations:
Preemptive shipments: Warehouses likely cleared backlogged goods in May, reducing June demand.
Production timelines: Orders placed after the May 14 announcement require manufacturing lead times, meaning shipments may only materialize by late June/July.
Tariff complexities: While the 125% retaliatory tariffs lifted, new 30% duties layered atop existing 301 tariffs maintain trade friction, potentially muting any shipment frenzy.
Market Signals: Rates and Space Allocation
Despite recent rate spikes, market indicators suggest nuanced conditions. The true test lies in how carriers allocate space between FOB (Free On Board) BCO (Beneficial Cargo Owner) contract shipments versus NVOCC (Non-Vessel Operating Common Carrier) spot bookings. Currently, few BCOs appear scrambling for FAK (Freight All Kinds) space, while NVOCCs report ample access to negotiated-rate allocations—suggesting vessels aren't at full capacity.
Ultimately, rate sustainability hinges on actual load factors, not speculative hype.
Congestion Forecast: Timing and Contingencies
Port data shows activity intensifying by late June. Whether this escalates into systemic congestion depends on whether increased capacity meets proportional demand. Temporary volume spikes (2-3 weeks) remain manageable, but sustained 20%+ increases over a month would heighten congestion risks—potentially manifesting by late July.
Shippers and forwarders should monitor port dynamics closely, considering strategies like:
- Advanced shipment scheduling
- Alternative routing options
- Multimodal transport diversification
While another "megacongestion" scenario remains uncertain, proactive planning can mitigate supply chain vulnerabilities during this volatile trade reshuffling period.