Posted on November 16, 2022
Imports into the nation’s busiest container port complex in Southern California are plummeting as U.S. trade sputters and retailers and manufacturers shift their supply chains amid increasingly contentious West Coast port labor negotiations.
The neighboring ports of Los Angeles and Long Beach handled 630,231 loaded inbound containers in October, down 26% from the same month a year ago and the lowest volume of goods coming into the ports since May 2020.
Gene Seroka, the executive director of the Port of Los Angeles, said Tuesday that the biggest factor in the cargo declines, which began in August, is that importers are moving more of their goods to East Coast and Gulf Coast ports “due to protracted labor negotiations.”
“We’ve got to get that cargo back,” Mr. Seroka said.
Some shipping industry officials had hoped that the labor talks, which began in May, would have concluded by now. But the talks have stalled for several months and officials now believe they aren’t likely to conclude until early 2023 at the soonest.
The talks cover more than 22,000 workers at 29 ports from Washington state to California and involve about 70 employers who run cargo-handling operations. The talks have been held up in recent months because of a dispute between the International Longshore and Warehouse Union, which represents dockworkers, and another union over which workers perform certain jobs at a single terminal at the Port of Seattle.
The ILWU and the Pacific Maritime Association, which represents employers in the talks, didn’t immediately respond to requests for comment.
Importers have said they are avoiding West Coast ports because previous contract talks have turned contentious and led to cargo slowdowns. Over the past few months, several West Coast ports have experienced sporadic work disruptions, although port officials say overall container movements remain steady.
The declines are a contrast to East Coast ports that continue to see strong cargo volumes. Loaded imports at the Port of New York and New Jersey rose 12% year over year in September.
Descartes Datamyne, a trade intelligence arm of supply-chain software provider Descartes Systems Group Inc., said in its latest trade report that overall U.S. container imports fell 13% in October from the same month a year ago but were still above the prepandemic level in October 2019. The report said inbound volumes from China fell 5.8% from September to October and were down 22.8% from the 2022 high in August.
Some importers pulled in end-of-year goods earlier than usual this year to mitigate the risk of potential backups. That has also contributed to the recent decline in cargo volumes during what is normally a peak season for ocean shipping.
Mr. Seroka said cargo volumes are also falling because of a decline in consumer spending on household goods such as furniture and appliances.
The ports of Los Angeles and Long Beach are the biggest U.S. ports on important trade lanes with Asia. The ports became so congested during the Covid-19 pandemic-era buying spree that dozens of ships were forced to wait weeks at a time to unload at the ports.