Long Beach's Record Year: A Trading Setup or a Tariff Peak?

The immediate trading event is clear: the Port of Long Beach is on track to post its busiest year ever. Through November, it moved 9,047,477 TEUs, a 2.9% increase over the same period last year and well on its way to surpassing the all-time record of 9.6 million TEUs set in 2024. This operational beat is a strong signal of the port's resilience and efficiency.

Yet the setup is defined by conflicting signals. The record year was fueled by a strategic frontloading of goods ahead of tariffs, a surge that has now faded. November volumes tell the story of the slowdown: the port handled 817,561 TEUs, a 7.5% decline from the same month last year. This drop is not an anomaly; it reflects a broader trend where importers, having stocked up, are pulling back on new orders. The National Retail Federation's data shows container ports handled 2.07 million TEUs in October, down 7.9% year-over-year, with November and December forecasts pointing to continued weakness.

The bottom line is a tactical peak. Port leadership expects stable operations through year-end and anticipates only a moderate increase in cargo volumes in 2026. This signals a return to more normal growth after the artificial spike. For traders, the catalyst is the record year itself-a strong beat that has likely been priced in. The fading tariff-driven surge, however, suggests the peak in cargo flows is in. The opportunity now is to assess whether the port's operational excellence can support its stock through a period of moderating volume, or if the slowdown will pressure earnings.

The Financial and Policy Setup for 2026

The immediate financial and policy setup is a study in contrasts. On one hand, the port's operational excellence is undeniable. Through November, it moved 9,047,477 TEUs, a 2.9% year-over-year gain, and finished November with its second-busiest month ever. This reliability-no congestion, no backed-up ships-was a critical factor in attracting that tariff-driven frontloading surge. On the other hand, the policy catalyst that fueled the record is now the primary overhang for 2026.

Port leadership is being candid about the outlook. CEO Mario Cordero stated the port expects a moderate increase in cargo volumes in 2026. This is a clear retreat from the explosive growth of 2025, which was artificially inflated by importers rushing to beat new tariffs. The sustainability of the record year hinges entirely on the resolution of this tariff uncertainty. Without a clear, stable trade policy, importers will remain hesitant, and the port's forecast of a "moderate increase" may prove optimistic.

The new CEO, Noel Hacegaba, has laid out a $3.2 billion investment plan to double capacity by 2050, a long-term bet on future growth. But in the near term, the port must navigate the disconnect between its record 2025 performance and a 2026 that looks more like a recovery than a repeat. The financial impact will be measured in whether operational efficiency can offset moderating volumes, or if the slowdown will pressure earnings.

Catalysts and Risks: What to Watch Next

The immediate test for the investment thesis is clear. The record year is a done deal, but the market will now scrutinize two factors: the durability of the 2026 volume forecast and the stability of the port's operational edge during a major transition.

First, watch the 2026 volume data. The port's own guidance is a moderate increase, a stark contrast to the tariff-fueled surge of 2025. The November slowdown, with a 7.5% year-over-year decline in imports, is the early signal of that moderating trend. The key will be whether this is a temporary pullback or the start of a sustained plateau. Any data showing a sharper drop than expected would confirm the thesis that the tariff peak has passed and pressure earnings. Conversely, if volumes stabilize or show unexpected resilience in the first half of 2026, it could suggest importers are finding new trade patterns or that the port's reliability is attracting cargo regardless of policy noise.

Second, monitor for any shifts in U.S. tariff policy. Port officials have explicitly stated that this is the key determinant of cargo flows. The current uncertainty is a headwind, but a clear resolution-whether a deal or a new policy framework-could provide a catalyst to re-accelerate growth. The market will assess whether the port's operational smoothness, which helped it handle the surge, can be maintained through the planned transition to zero-emissions technology and rail expansion. The new CEO's $3.2 billion investment plan aims to double capacity by 2050, but execution risks are real. Any disruption to the seamless operations that defined 2025 would directly threaten the port's competitive advantage and its ability to attract cargo in a volatile environment.

The bottom line is that the catalyst has shifted from the record year to the port's ability to navigate the post-tariff landscape. The setup now hinges on whether operational excellence can offset moderating volumes, or if the slowdown will pressure earnings.