The Port of Los Angeles, the busiest port in the United States, continues to operate normally despite challenges such as government shutdowns and trade wars. There have been no delays in goods at the port. Experts suggest that complaints about packages being destroyed or detained may be related to the termination of the “low-value parcel tariff exemption system.”
As of Wednesday, the U.S. federal government has been shut down for 15 days, with “non-essential” government agencies closed. However, the supply chain operations at Western ports have not encountered major disruptions.
Gene Seroka, the Executive Director of the Port of Los Angeles, stated during a monthly online press briefing on Wednesday that as a municipal agency belonging to the city of Los Angeles, they continue to operate daily without any impact from the federal government shutdown. Customs and Border Protection (CBP) operations are also functioning normally.
Richard DiNucci, a senior international trade consultant and former CBP Director of Operations, added that containers are still being transported, contraband is still being intercepted, travelers are still moving, aircraft landing permits are still being issued, and goods are still being transported through express shipping facilities. Everything is running as usual.
Despite the federal government shutdown, the U.S.-China trade war continues. Starting on the 14th, the U.S. and China began levying port fees on each other’s vessels. The U.S. imposes port fees on Chinese company vessels and Chinese-manufactured vessels docking at ports, as well as additional tariffs on Chinese-made port equipment such as cranes, forklifts, and tractors.
“In terms of this week, only one Chinese-built vessel has docked at the Port of Los Angeles,” Seroka said. Additionally, equipment like shore cranes produced in China will face a 100% tariff, while cargo handling equipment will face a 150% new tariff.
With the holiday shopping season approaching, many retailers are concerned about potential shortages in goods, and consumers worry about being unable to purchase desired items. However, Seroka pointed out that there are no import goods backlog issues at the Port of Los Angeles currently, and the speed of goods circulation at the port is quite rapid.
Port system data shows that cargo stays less than three days for railway transportation and approximately three days for truck transportation. In terms of exports, most containers are “newly arrived” within 0 to 4 days; ships typically stay in Los Angeles for about 4 days.
The U.S. is undergoing a significant overhaul in its trade policies with other countries, and many fear that imported new cars could become more expensive as a result.
Seroka explained that foreign vessels transporting cars from Mexico and Canada, following the standards of the United States-Mexico-Canada Agreement (USMCA), do indeed need to pay additional port fees. However, in Southern California, the largest automotive market in the U.S., most new cars from Mexico and Canada are initially transported by train and then transferred by trucks. Therefore, the fees have not had a significant impact on transportation so far.
Ferry boats and car carrier ships from Asia will start facing related fees starting in December, Seroka noted. He pointed out, “While we have indeed seen business from brands like Mazda, Nissan, and Toyota at the Port of Long Beach, we still need to observe the developments in the coming days and weeks.”
After August 29th, many reports surfaced of small parcel packages being destroyed, with some questioning whether this was due to ports and customs being unable to process them in a timely manner. Seroka clarified that both the port and CBP are functioning normally, and there are no package backlog issues at the port. The impact on small parcel packages may be related to the U.S. permanently canceling the low-value parcel tariff exemption system.
The U.S. officially revoked the “low-value duty-free” (De Minimis) benefit for imported packages valued below $800 on the 29th. In other words, small parcel packages from all countries no longer enjoy duty-free treatment.
Packages transported through courier companies such as FedEx, UPS, and DHL will now be subject to tariffs based on the actual value of the goods, with the courier companies collecting and processing customs duties. Mainland Chinese e-commerce businesses are particularly affected by this change.
Seroka analyzed on Wednesday that many individuals who bought items with small parcel packages were required to pay additional taxes before receiving their packages, leading some of them to reject the items.
“Some may not have anticipated having to pay taxes now, or the taxes they need to pay are much higher than expected, or the value of the items themselves may not justify paying that much tax,” he said. “So, I don’t believe this is due to customs not handling it in time. At least, there is no official explanation to confirm this yet.”
Additionally, Seroka noticed a phenomenon: “We see many small packages that used to qualify for ‘low-value exemptions’ being consolidated into larger containers for further distribution upon arrival at the port.”
Despite the myriad challenges, the performance of the Port of Los Angeles in September remained impressive. Seroka highlighted that the port processed over 880,000 twenty-foot equivalent units (TEUs) in September, setting a record for the best quarter. In terms of exports, the port handled over 110,000 container units, nearly on par with the same period last year.
“However, we have passed the peak season, so we expect a slowdown in cargo volume in the last three months of this year,” he continued. He added that the entire supply chain this year has been like a roller coaster ride: when trade policies change, importers hit the brakes immediately; when policies are relaxed and deadlines extended, freight volume rebounds.
With the continuous changes in trade policies, he candidly admitted that the future is full of uncertainty.