San Pedro Bay TEUs Rise to 3rd Highest on Record as Market Avoids Cost Pressure
Even with container rates climbing to new highs, the Los Angeles/Long Beach port is holding strong, according to a JLL report.
July delivered the third-highest import 20-foot equivalent unit (TEU) total for the San Pedro Bay Port on record. While
Logan Hood, JLL's senior research analyst, expects August volume to be lower compared with the previous month — activity i still showing resilience in this environment.
"Security concerns at the Suez Canal and worsening drought conditions at the Panama Canal are prompting port authorities to anticipate additional rerouted volume," she told GlobeSt.com.
"What's equally interesting is how fuel surcharges are holding relatively low across the LA infill markets closest to the ports — South Bay, Central, Mid-Counties, and even select Inland Empire micro-markets."
Hood said that much of that cost pressure is being pushed to longer-haul routes into the Central Valley, Las Vegas and Phoenix, where fuel is a more meaningful component of service.
"Taken together, these dynamics point to a healthy near-term outlook for Southern California industrial demand. In several infill submarkets, owners may find themselves with increased leverage, particularly those holding Class B assets as Class A supply continues to tighten," according to Hood.
"Tenants are clearly sensing an inflection point, and when you combine that with the influx of aerospace, defense tech, and AV technology users, it's no surprise we've seen such strong industrial leasing activity through the first half of the year."
Import Demand Shifts To Machinery And Tech
The San Pedro Bay Port Complex processed nearly 10 million TEUs in H1 2026, with loaded imports holding above the five-year average for 24 of the last 26 months.
Import demand is increasingly shifting towards machinery, technology and AI-related equipment. In fact, machinery & tech now represents 61% of customs import value, up from roughly 15% in 2019.
Additionally, container rates from East Asia to the West Coast have risen 170% since mid-May and are up 314% since the start of the Iran conflict.
Rising diesel costs have driven fuel surcharges (FSCs) to an average of 31% above base drayage across Southwest markets (LA, IE, LV, PHX). This increase is up from the 8% level in January.
Source: GlobeSt/ALM