With languishing contract talks looking as if they’ll have no quick end in sight, shippers are continuing to shift their business to Gulf and East coast ports, resulting in a relief from congestion in the ports of Los Angeles and Long Beach.
But that’s also brought an unwelcome slowdown in longshore work shifts and rising concerns that some of the lost business may not come back.
Port of Los Angeles Executive Director Gene Seroka addressed the feast-to-famine climate at the LA harbor commission meeting on Thursday, Nov. 3, telling commissioners that cargo volumes are now dropping significantly, with October numbers expected to again show a “significant drop.”
“As of yesterday, there were eight container vessels at berth being worked,” Seroka said. “That’s 20% below the average of 10 vessels prior to COVID.”
There were three vessels at anchor waiting to enter both ports, he added, down from a peak of 109 ships forming what was called an armada outside the breakwater in January.
“I’m reminded of, ‘Be careful what you wish for,’” said harbor Commissioner Diane Middleton. “A 20% drop in cargo volume, wow. With that drop, there has been a tremendous loss of work opportunities.”
While dockworkers were scrambling to cover shifts seven days a week not long ago, they now are sometimes only getting four days of work, Middleton said.
“(Part-time) casuals are working one or two days a month,” she added, “so while the drop in cargo volume brought some good things in terms of the supply chain, everyone was used to all that work and now work’s drying up.”
Shipments have been moving to other ports, Seroka said, because of concerns that the contract talks, which are five months beyond the July expiration of the previous agreement, could prompt disruptions in moving cargo.
The slowdown has also been caused by consumers pulling back on purchases in a less-certain economy, especially on big-ticket items such as appliances and home improvement goods that became popular during the pandemic.
Peak season holiday goods also shipped early this year — in June and July — making the more traditional peak season months of August and September drop off significantly, Seroka said.
A recent snag in the contract negotiations centers around a jurisdictional dispute at a terminal in the Port of Seattle. A Nov. 2 article in the Journal of Commerce, meanwhile, reported that cargo-handling operations were disrupted at the Port of Oakland when marine clerks picketed over a travel pay issue for dockworkers who come into the port from other locations. The picketing forced three of Oakland’s four container terminals to stop operation on Wednesday, Nov. 2.
Still, officials have tried remain sanguine about the situation, saying the talks continue.
“Port operations continue without disruption and we expect this to remain so as the parties continue to work towards an agreement,” Noel Hacegaba, deputy executive director of the Long Beach port, previously said in a written statement.
Both sides in the talks have also signed an agreement pledging to not have work slowdowns or lockouts. Despite that, however, importers remain skittish about the situation and are bypassing the West Coast ports in favor of sending shipments through New York/New Jersey and the Gulf.
“In my entire time at the Port of Los Angeles, over nine years, there’s never been a time when both the Port of L.A. and Long Beach were out-performed by New York/New Jersey,” said Commissioner Ed Renwick, “so that’s a shocking development.”
The LA and Long Beach ports are typically the busiest in the nation.
While Renwick said he doesn’t anticipate that being a long-term trend, he did wonder whether some of the traffic that went back east could be permanently gone.
Indeed, Seroka said, some of it may never return.
“History has shown,” Seroka said, “that in this type of disruption, as cargo diverts, for a number of reasons, some of it stays and does not come back to the West Coast.”
The situation, he added, has a ripple effect on jobs in many sectors of the economy.
“There are seasoned negotiators at the table with both labor and the PMA,” he said, referring to the Pacific Maritime Association, which represents employers.
Seroka has been traveling in the past few weeks, including going to Asia and Europe, as he works to reassure the industry that the Port of Los Angeles remains open for business and is no longer congested.
“I’m dismayed to see there isn’t more urgency in these contract negotiations,” said board President Jaime Lee, “to get things wrapped up and get cargo coming back.”