August 31, 2020 — Port of Redwood City announced this week that total cargo tonnage is down by 21 percent from a year ago – a phenomenon that has affected ports across the globe as they’ve grappled with decreased consumer demand, government mandates and canceled sailings in the wake of the COVID-19 pandemic.
The total cumulative Fiscal Year 2019-2020 tonnage was 2.1 metric tons (MT) as opposed to 2.65 MT in Fiscal Year 2018-2019 – a reduction of 547,682 MT. However, the volume still exceeds the most recent tonnage shortfall in 2017 of 1.55 MT.
“Most of this decline took place in the fourth quarter of our fiscal year, which tells us it is a direct result of the statewide mandates impacting the construction industry due to COVID-19,” explained Port of Redwood City Board Chairman Ralph A. Garcia. “Prior to that, we were on track for our third record-breaking year in a row with cargo movement.”
Despite these numbers, Port officials are optimistic that the dip will be short lived, as cargo numbers are back up to about 80 percent of pre-COVID and are still considerably higher than the numbers from 2017.
From a financial standpoint, the reduction in tonnage movement affects the Port’s gross revenues by about 6 percent, from $9.3 million to $8.7 million over the previous year.
Thankfully, the decline will not immediately affect the Port’s fiscal resiliency since the agency already operates with a conservative budget and lean staff. Further, the Port has been diligent in building a strong reserve over the years to help them through unexpected downturns.
“Despite the market’s reaction to this pandemic, the Port is in an enviable position in that we’re not having to tap our reserves or reduce operational levels,” said Port Executive Director Kristine A. Zortman. “Still, we are keeping a close eye on global conditions and will be adjusting things as needed as we continue to monitor this turbulent time.”
Other circumstances that could help tonnage continue to rebound include the passage of an infrastructure bill, which could increase construction material movement through the Port once projects get underway, and a vaccine for COVID19, which is expected to increase consumer confidence and spur more cargo movement.
“Port business is a global one, and market conditions shift due to a variety of factors,” said Zortman. “Our job is to ensure we navigate these changes as efficiently as possible to enable a strong fiscal footing for the Port’s long-term health.”