A sea lion gang gathered on the bow of a ship to watch the workforce in action at the Port of Los Angeles. (Port of Los Angeles)
Cargo numbers continued to push higher at the Port of Los Angeles in February — but it came with some caution that the pace could slow by midyear.
“At some point, we will see a softening of the numbers,” Executive Director Gene Seroka said in his monthly virtual news conference March 19, adding that it is possible to see a 10% decline in volume in the second half of 2025.
While it is still early in the year, consumer confidence and spending are expected to see a potential downturn, a point made in Seroka’s discussion with this month’s guest, Nela Richardson, chief economist at Automatic Data Processing Research, which analyzes the labor market and employee performance.
“There are a lot of things happening at the same time,” Richardson said, highlighting the March 19 Federal Reserve meeting about interest rates that were kept unchanged. “There are a lot of moving parts here and all of them are going to have specific and collective impacts.”
READ MORE: Shipping Group Says Trump Port Fee Plan Will Hurt Economy
February cargo numbers — with 801,398 units flowing through the port — was the “second busiest February on record” and 2.5% more than the same month in 2024, Seroka said.
Seroka
But, he said, shippers and retailers front-loading cargo continued to influence those high numbers as they try to get cargo sent before tariffs set in.
“For 17 of the last 19 months,” Seroka said, “the Port of Los Angeles has experienced year-over-year cargo growth, all without ship delays or back-ups on our docks.”
Retailers and manufacturers “have been importing their products through Los Angeles earlier than usual as a hedge against tariffs,” Seroka said. “Given the substantial inventory already here, and the uncertainty of tariffs, it’s possible we could see a 10% volume decline in the second half of the year.”
There was little else being discussed at the recent TPM Conference for the shipping industry in Long Beach, Seroka said.
“The overall mood of the 4,200 attending” was concentrated on concerns over the coming tariffs, Seroka said.
After a record start to 2025, Port of Los Angeles cargo volume remained strong into February. The #PortofLA processed 801,398 container units last month, which was 2.5% more than last year and marked the Port’s second-busiest February on record. https://t.co/9NU02DnSla pic.twitter.com/MeBwdNnoQy
— Port of Los Angeles (@PortofLA) March 19, 2025
“Many of us were reacting in real time to the rapidly changing” news and the developments coming out of Washington about the tariffs, he said.
“Many of the executives were spending time (talking about) tariff ‘what-if’ scenarios,” Seroka added. “This has profound implications for the private sector across the board.”
Consumer spending, meanwhile, looks to be slowing in 2025, though it is still early, Richardson said.
“We saw a big slowdown in January,” she said, “but the good news is by February, we’d recovered some of that.”
Large items such as furniture and luxury items could begin to see spending retreats sooner if the economy slows, Seroka said.
Richardson
In the “big picture,” Richardson said, “we are in a really solid time. But under the hood of that car, there are a number of bubbles that economists are concerned about.”
The labor market, she said, is exceptionally stable with layoffs at historic lows.
“Workers are staying at companies longer and companies are keeping employees longer,” she said. “Wages are elevated but starting to come down.”
The workforce is also aging, Richardson said, and the growth of artificial intelligence could impact the workplace in coming years and decades.
“We have 10 million workers every day reaching retirement age,” she said, adding that will lead to a transformation in the labor market.
Inflation also continues to be a factor, she added.
“We already have a fatigued consumer who continues to spend,” Richardson said, “but we’ve seen some fracturing in recent retail numbers and expectations.”
Seroka also noted differences in tariffs this time around compared to those imposed during the first Trump administration.
“Compared to the first time,” he said, “tariffs (then) were more narrowly focused, there were specific lists.”
During that period, around March 2018, Seroka said, “we saw peak runs of cargo coming in and then pretty severe drop-offs afterward.”
“We saw a 16% drop in our business at the Port of Los Angeles (in 2019),” he added. “It just kind of gummed up the works of the supply chain.”
The tariffs being proposed now, Seroka said, are wider — such as covering all goods imported from China.
A special concern, he said, is how tariffs will impact the rebuilding effort for Southern California’s fire areas.
“To build these houses, we need softwood lumber, aluminum and steel from Canada, appliances from Mexico,” Seroka said, “and all of those prices are going up.”
Policymakers need to be pressed to consider the rebuilding efforts, he said.
Tariffs will also likely prompt some shift in items that typically come from China to other countries in Asia, Seroka said.
