Companies operating at the Port of Los Angeles, is experiencing a significant decrease in container volumes. This decline is expected to persist as container ships are diverting to the East Coast in order to avoid potential delays resulting from ongoing labor discussions at the West Coast port. The neighboring Port of Long Beach has also witnessed a similar downturn due to negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU), affecting dockworkers across terminals from California to Washington state.
According to Gene Seroka, the executive director of the Port of Los Angeles, cargo is intentionally being redirected from West Coast ports to the East Coast and the US Gulf to mitigate supply chain risks associated with labor contract negotiations. In April, the busiest port in North America handled approximately 688,000 twenty-foot equivalent units (TEUs), marking a 22% decrease compared to the same period last year, which was the second busiest April on record due to the pandemic. While April's figures showed a 10% increase in container volume compared to March and a 38% increase compared to February, it is highly unlikely that the volume in 2023 will come close to the 9.9 million TEUs recorded in 2022.
The decline in container volumes coincides with the ongoing negotiations between the PMA and the ILWU, which commenced in May 2022 to replace the expired labor contract from July. The PMA, representing 70 ocean carriers and terminal operators at 29 US West Coast ports, has accused the ILWU of deliberately disrupting operations three times at the California ports since March. The ILWU has refuted these allegations. Nevertheless, the protracted negotiations and accusations have compelled shippers to divert their cargo to East Coast ports to ensure timely deliveries to their destinations.