Panama Canal to cut vessel draft limits ahead of El Niño

Port of Los Angeles Executive Director Gene Seroka said big box retailers are keeping the peak shipping season running longer than expected, with loaded imports reaching 530,558 20-foot-equivalent units in June, the port’s third-highest monthly total on record. “The peak is lasting longer than many of us thought, even going back a couple of months ago,” Seroka said in an interview with The Wall Street Journal’s Logistics Report.

The longer-than-expected peak runs counter to shipping industry expectations that an early rush of goods would bring an earlier end to the traditional peak shipping season, when retailers bring in end-of-year holiday items. Seroka said big box retailers still have plenty of cargo to bring into the country, sustaining elevated volumes at America’s busiest gateway for container imports.

Ocean shipping rates surged earlier than usual this year, in May, as some importers brought forward orders from Asian factories. Seroka attributed the surge largely to small to midsize importers trying to get ahead of rising costs from tariffs and fuel surcharges triggered by the war in Iran. Big box retailers, he said, are driving heavy volumes of clothes, electronics and furniture through Los Angeles and the neighboring Port of Long Beach this summer.

Seroka said he expects July’s loaded imports to come in between 475,000 and 500,000 TEU. Forecasts for an especially strong El Niño, plus continued bypassing of the Suez Canal as conflict in the Middle East persists, could raise imports into Southern California about 5%, he said.

The Panama Canal is imposing draft limits on vessels ahead of potential El Niño-related droughts, which could divert shipments to Los Angeles and Long Beach, Seroka said. Starting Sept. 3, vessels transiting the canal’s Neopanamax locks will face a maximum draft below the usual 50 feet, amid forecasts for a strong El Niño.

China, meanwhile, is becoming a factory for factories, according to the Logistics Report. No longer just a producer of low-value consumer goods, the country is exporting more of the higher-value intermediate and capital goods that underpin global manufacturing, such as chips, precision machinery and robotic arms. In the first five months of 2026, China’s exports of intermediate and capital goods jumped 25% and 12%, respectively, from the same period a year earlier, while consumer goods exports increased 4%, according to a McKinsey Global Institute analysis of China’s official customs data.

The transformation threatens advanced-manufacturing economies such as the European Union, Japan and South Korea, the report says. Producers of chemicals, machines, batteries and other industrial goods in those economies once depended on Chinese factories as customers; they now face China as a competitor abroad and in their home markets. “The era where China just served as the world’s factory is over,” said Henry Wang, co-founder of Dongguan ICT Technology, an exporter of automated systems that assemble circuit boards.