Top U.S. port sets import record, eyes China COVID risk

By Lisa Baertlein

LOS ANGELES (Reuters) - The busiest U.S. seaport expects its robust flow of imports to continue in the near term, but is closely monitoring COVID-19 shutdowns in major cities in China, its executive director said on Wednesday.

"In the weeks ahead, we expect to see an increase in vessels headed our way as retailers to get a big push to replenish shelves," Port of Los Angeles Executive Director Gene Seroka said on a media call.

"We're also watching very closely the events in China with yet another wave of COVID-19 spreading through major cities and businesses," Seroka said.

The Port of Los Angeles and the adjacent Port of Long Beach handle more imports from China than any other U.S. ocean gateways. They set a new record for imports in February, handling a combined 814,408 20-foot equivalent units (TEU) - 3.5% more than the year earlier.

Forty-four ships are already sailing cargo to the Southern California port complex, versus the 30 that are typically seen at this time of the year, Seroka said.

Meanwhile, China has put millions of people under lockdown in a bid to stop the spread of a highly contagious Omicron variant. That action is already impacting factories that make everything from electric scooters to Apple (NASDAQ:AAPL) iPhones.

China has imposed some of the toughest measures in the key manufacturing hubs of Shenzhen, Dongguan and Changchun, as well as the financial center of Shanghai - home to the world's busiest container port.

Many small, high-value electronics from Shenzen enter the United States by plane. Inexpensive or bulky items move by ship, including Mattel (NASDAQ:MAT) toys, furniture and other home goods sold by QVC owner Qurate Retail Group (NASDAQ:QRTEA), and dishwashers from Samsung Electronics (OTC:SSNLF), said Eric Oak, a supply chain analyst at S&P Global (NYSE:SPGI) Market Intelligence's trade data firm Panjiva. Mattel, Qurate and Samsung (KS:005930) did not immediately respond to requests for comment.

While major air and sea ports in Shenzhen and Shanghai continue to operate, locals are reporting that trucks are delayed by road and testing restrictions and that some Shenzen warehouses are no longer accepting deliveries.

The supply chain depends on all of the links working together, said Phil Levy, chief economist for freight forwarder Flexport. "If you don't have truckers and you don't have warehouses, (you can move) things already in process, but you'll have a problem with new stuff," Levy said.

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