Why did the Port of LA achieve record volume in September despite economic uncertainty?

The port benefited from three converging factors: lower tariff levels reduced per-unit costs, consumer demand remained resilient, and significant cargo shifted away from the Panama Canal (due to drought-related constraints and higher fuel costs tied to Middle East conflict) and Suez routes. September imports alone reached 546,000 loaded TEUs, up 19 percent year over year and 26 percent above the five-year average.

What sourcing changes are reflected in the LA port's cargo mix?

Vietnam is now the second-largest trading partner behind China, with volume quadrupling over the past decade. Thailand has entered the top five for the first time. China's share of port business has fallen from 60 percent to 40 percent. However, much of this shift reflects changes in final assembly: Vietnam and Mexico still rely heavily on Chinese components, so true upstream diversification is slower than many importers would prefer.

What is the main operational risk the port chief identified?

Tariff uncertainty remains the central source of risk. Importers are making rapid purchasing and routing decisions based on cost, demand, and policy deadlines rather than long-term planning. Rail dwell times also require close monitoring as the port moves holiday cargo inland. While truck turns are healthy and large vessels turn in about four days, inland rail operations could become a bottleneck.

How long is peak season expected to last?

The port expects October volume of about 900,000 TEUs, driven by typhoon-related schedule disruptions in Asia, cargo roll pools before China's national holiday, and continued holiday-season replenishment. However, November and December are difficult to forecast due to tariff uncertainty.

Why is building alternative supplier networks in Mexico slow?

According to Harvard Business School Professor Willy Shih, building comparable supplier networks in Mexico could take approximately a decade. Companies are currently optimizing for sourcing optionality rather than lowest cost, because frequent policy changes make long-term commitments difficult. This means diversification appears greater than it actually is operationally.

Trade Policy & Tariffs

High Impact

LA Port Sets Record but Warns Tariff Volatility Threatens Planning

Oct 13, 2026

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The signal

The Port of Los Angeles achieved record throughput in September with 1.42 million TEUs, driven by lower tariffs, resilient consumer demand, and cargo diverted from Panama Canal and Suez constraints. However, Executive Director Gene Seroka cautioned that tariff volatility creates significant planning risk for importers and carriers, as rapid policy shifts force constant sourcing and routing decisions.

The port's year-to-date volume of 8.1 million TEUs reflects a structural shift in Asian sourcing: Vietnam has become the second-largest trading partner (quadrupling over the past decade), China's share has dropped from 60 percent to 40 percent, and Thailand has entered the top five. Yet Harvard Business School Professor Willy Shih noted that this diversification is partly illusory, as Vietnam and Mexico still depend heavily on Chinese components, and building equivalent supplier networks in Mexico could take a decade.

Key operational challenges include rail dwell times, which require close monitoring as holiday cargo moves inland, while ocean carriers continue shifting business to LA from constrained alternative routes.

#port-of-los-angeles

#tariff-policy

#panama-canal-disruption

#supply-chain-routing

#import-volume

#trade-uncertainty

#sourcing-diversification

#container-demand

#china-vietnam-shift

#ocean-freight

Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

strategic

What if tariff rates spike 25 percent in Q1 2027?

Model a scenario where applied tariff rates on imports through LA increase 25 percent starting January 2027. Assess impact on inbound container volume, shipper routing decisions (diversion to other ports or air freight), inventory positioning strategy, and purchase order timing. Assume importers shift orders forward or seek alternative sourcing regions. Calculate cost pass-through and demand elasticity effects on port throughput.

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Simulation Suggestion

this month

What if Panama Canal drought constraints persist for 12 months?

Simulate sustained Panama Canal capacity constraints through 2027, forcing continued cargo diversion to LA and West Coast ports. Model increased competition for LA berth slots, higher terminal fees, extended vessel wait times, and knock-on effects on rail dwell. Calculate modal shift impacts (more cargo staying on rail longer), equipment repositioning costs, and potential service level degradation.

Run this scenario

Simulation Suggestion

strategic

What if Vietnam sourcing continues to grow 15 percent annually?

Project Vietnam import volume growth at 15 percent annually through 2030 based on current diversification trends. Model geographic shift in Asia sourcing, changes in supplier concentration risk, and implications for supply chain resilience. Assess whether LA port capacity expansion plans align with this demand. Evaluate ripple effects on Chinese export volumes and alternative trade lanes.

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