Dissecting the Backhaul Trade: Empties vs. Exports
By Jock O’Connell
I spent the better part of Bloomsday, the annual June 16 commemoration of Leopold Bloom’s wanderings through the streets of 1904 Dublin as related in James Joyce’s Ulysses, reading a new study of Irish emigration to North America. As with other immigrants fetching up at immigration stations like Ellis Island or Boston’s Long Wharf, these refugees could be turned around if found to be infected by communicable disease or afflicted by mental illness. They thus became, in effect, part of the backhaul of the transatlantic trade.
So it was with some peculiar poignancy that a reporter called me to fact-check the latest statistics on container trade through the Port of Los Angeles. After confirming his tally of inbound loaded TEUs at the port, I then began to offer him the most recent figures on outbound loads.
“Oh, we’re not concerned with exports,” they said before hastily ringing off…and not giving me time to observe that more than a few manufacturers and farmers probably read their newspaper.
This reporter’s dismissiveness was scarcely surprising. Maritime exports tend to be regarded as the logistical stepchildren of America’s container trade. It’s the import volumes that drive the nation’s maritime trade.
Containerized imports also furnish the empty boxes in which stuff produced in the United States can be sent abroad, usually at shipping rates that are a fraction of the ocean transport charges incurred by importers. To a very large extent, the contents of those outbound boxes are sourced not from America’s high-tech industries – their exports are chiefly airborne – but are instead comprised mostly of farm produce, waste and scrap materials, and the residues of industrial processes. Without relatively hefty headhaul rates helping to underwrite roundtrip ocean shipping costs, a great deal of today’s backhaul might be priced out of foreign markets.
Still, containerized exports do sporadically grab the public’s attention. Earlier in this decade, a pandemic-era controversy over what was seen to be an excessive number of empty export containers led to the Ocean Shipping Reform Act of 2021. Back then, some U.S. exporters (most prominently those dealing in agricultural commodities) were aggrieved by the wide gap between the numbers of loaded and empty TEUs being shipped from several U.S. ports. Many of those empty boxes, it was argued, should have been loaded up with U.S. goods, especially farm produce.
Although much of that imbalance between outbound loads and empties mirrored the nation’s overall merchandise trade deficit, there were those who theorized that spikes in transpacific shipping rates had incentivized the hasty emptying of imported containers and their rapid repatriation to foreign ports, where they could be filled with more merchandise for transport back to the United States. These frustrated exporters then successfully appealed to Congress and the Federal Maritime Commission for relief.
This was only the latest variation on the issue of trade imbalances, whether measured in dollars, metric tons, or TEUs, which has taunted American policymakers for decades. The last U.S. merchandise trade surplus was recorded a half-century ago in 1975, but even that was an anomaly caused by OPEC’s sharp increase in oil prices that rattled international commerce.
President Trump, who is determined to use unusually high tariffs to remedy America’s persistent merchandise trade deficits by slashing imports, is not the first to attempt to tackle the challenge. But previous occupants of the White House were more apt to favor policies that encouraged higher levels of exports to right the imbalances. In 1988, Ronald Reagan launched an Export Now project, while in 2010 Barrack Obama announced an even more ambitious National Export Initiative, the goal of which was to “double our exports over the next five years.” In as much as this initiative included funds for state and even local export promotion programs, there ensued a boom in overseas trade offices, where the state officials could spend a year or two enjoying an expat existence in commercial capitals like London, Frankfurt, Tokyo, and Hong Kong.
As Exhibit A reveals, Obama’s Initiative may have yielded some dividends in boosting overall U.S. exports. But, five years later, real exports had only grown by 17.8%. Since then, exports have indeed marched up, even though paced by a much less enthusiastic drummer than the one pacing imports.
As Exhibit B illustrates, the ever-widening gap between imports and exports has been acutely recorded in the container traffic passing through the nation’s seaports. Especially in the years when COVID scrambled global trade, inbound loaded TEUs have come to greatly exceed outbound loads at most major ports.
But it’s not just that the trade in laden containers is unbalanced, it’s also that the number of outbound empties has continued to exceed the number of outbound loads.
Exhibit C looks at the balance between outbound loads and empties at the Ports of Los Angeles and Long Beach over the past ten years. While growth in the level of empty boxes leaving San Pedro Bay has arguably moderated, the balance has also swung decisively in favor of outbound empties as the COVID pandemic took hold and severely disrupted commerce. Through the first five months of this year, outbound empties have accounted for 73.6% of total outbound container traffic from the two ports, up from 68.1% a year ago.
From time to time, a trade analyst will stumble across these numbers for Southern California ports and leap to a dubious generalization. Just last week, one reporter concluded that: “Empty container exports is [sic] a forward-looking indicator of demand.” Most of us are probably under the impression that the movement of loaded TEUs was an even clearer indicator of demand. More critically, though, the analysis ignores that bit of immortal waterfront wisdom that if you’ve seen one port, you’ve seen one port.
Consider the highly varied experiences the nation’s major ports have had with empty outbound containers. At the Port of Oakland, neither outbound loads nor outbound empties have rebounded from their pre-pandemic highs. Indeed, outbound loads last year (776,100 TEUs) were down 23.5% from a peak of 1,014,796 TEUs in 2013. Similarly, outbound empties from the Northern California port in 2024 (393,109 TEUs) were off from a high of 464,027 TEUs in 2018. Still, loaded outbound TEUs consistently accounted for the great majority of Oakland’s outbound shipments.
By contrast, the worst of the pandemic years saw exported empty TEUs actually overtake export loads at the Northwest Seaport Alliance Ports of Tacoma and Seattle. Last year’s 636,508 export loads were down by a peak of 984,274 laden export TEUs in 2016, while the 612,284 export empties shipped from the two ports last year were 19.2% off the high of 766,871 export empties recorded in 2022.
The imbalances were not limited to ports on the U.S. side of the border. As Exhibit F indicates, Canada’s largest maritime gateway, the Port of Vancouver in British Columbia, also experienced an enormous surge in outbound empty TEUs as the COVID epidemic unfolded. Within a decade, the port went from very substantial imbalances in favor of laden export TEUs to a virtual one-to-one ratio in the past two years. Not captured in Exhibit F is that outbound empties have accounted for 53.0% of outbound container shipments through the first four months of this year, up from 48.7% in the same months in 2024.
Elsewhere, empties accounted for 68.0% of all outbound TEUs at U.S. East Coast ports in the first four months of this year, up from 66.3% a year earlier. However, almost the reverse has been the case at the Port of Virginia, where outbound empties represented only a 37.3% share of all outbound TEUs through April of this year, down from a 38.1% share in the same period in 2024. Even during the most convulsive years of the COVID pandemic, empties never constituted more than 44.2% of all outbound TEUs from the Mid-Atlantic port.
At the Port of Savannah, the East Coast’s second busiest container port, outbound loads and empties have been remarkably balanced. Through April of this year, the Georgia port shipped 493,269 loaded TEUs and 477,989 empty TEUs. In all of last year, outbound loads totaled 1,376,887 TEUs against 1,377,540 outbound empties. At the Port of Charleston, however, while outbound empties represented 53.5% of all outbound TEUs through April of this year, their share a year earlier was only 42.4%.
On the Gulf Coast, just 25.3% of the 719,250 outbound TEUs shipped from Port Houston through the first four months of 2025 were empty, up very slightly from 25.1% a year earlier.
Although different ports have had different experiences with their containerized exports, the fundamental story here is that North America’s containerized export trade has yet to recover the volumes seen in pre-pandemic 2019. In the U.S., containerized export tonnage in 2024 was down 14.4% from 2019, while the real, inflation-adjusted value of those shipments fell by 8.7%. More recently, containerized exports in the first four months of 2025 have slipped from a year earlier by 1.7% in tonnage and by an even greater 6.9% in real value.
Far from searching out pernicious interests conspiring to do America wrong, the reality here and now is that America’s deteriorating container export trade and the growing backhaul trade in empty boxes are principally the result of the nation’s inability to produce at competitive prices higher volumes of the kinds of goods foreigners want to buy.
The commentary, views, and opinions expressed by Jock O’Connell are his own and do not reflect the views or positions of the Pacific Merchant Shipping Association. PMSA does not endorse, support, or make any representations regarding the content provided by any third party commentator.