The extensive labor negotiations between terminal owners and workers at U.S. West Coast ports have caused some shippers to reroute cargo through East Coast and Gulf Coast terminals.
The 29 West Coast seaports – including Los Angeles, Long Beach, Seattle-Tacoma, and Oakland – operate primarily through longshoremen, who load and unload ocean vessels and are represented by the International Longshore and Warehouse Union (ILWU).
The ILWU members’ labor contract expired on July 1, 2022. Terminal owners, represented by the Pacific Maritime Association (PMA), began mediations in May 2022 to define new working conditions and benefits.
U.S. Chamber of Commerce: What You Need to Know About West Coast Ports Labor Negotiations
But service disruption from labor unrest is not a new trend for international shipping. Over the past 20 years, there have been many operational interruptions labor disputes during contract deals.
At this time, no strike is anticipated, and the negotiating parties are committed to maintaining regular operations, there is uncertainty for cargo owners who are hesitant to return the shipment to the West Coast anytime soon.
While overall import volume from Asia to the West Coast has significantly declined year-over-year, U.S. East and Gulf Coast port volumes have enjoyed a modest boost in cargo trying to avoid transport delays.
WEST COAST PORT CONGESTION AND DELAYS
U.S. shippers claim that congestion problems, delays at inland ramps, and rail fluidity are other factors affecting the decision to return a significant volume to West Coast ports. Consequently, delays between 12 and 45 days have been experienced at Los Angeles and Long Beach ports for containers transported by truck and rail. In addition, California’s clean fleet rule, which recalled more than 4,000 trucks from marine terminals, raises further concerns about a possible trucking shortage of drayage solutions in the area.
Moreover, the rail network operated by Union Pacific (UP) suffered a disruption of mainline service on January 24, 2023. It led to the temporary suspension of service between the ports of LA/Long Beach and Council Bluffs, Kansas City, Chicago (Global 4), and Chicago (Ohio Valley).
For more information on the service disruption, please visit the Union Pacific Service Disruption Announcement.
PORT OF LOS ANGELES OPTIMISM
The Port of Los Angeles executive director, Gene Seroka, said to Spectrum News 1 SoCal that there has already been a decrease in 2023 in wait times at the Port of Los Angeles and announced improvements in digital tracking services, as well as improvements in the export modules for warehouses and the truck reservation system that will cover all marine terminals to schedule pickups and deliveries more quickly. He also addressed labor negotiations, assuring there would be no strike, and that both parties are diligently working to maintain productivity at the highest levels.
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