News

Cargo Moves to East Coast, Crimping LA‑Long Beach Volumes

August 19, 2014

Container volumes in Los Angeles-Long Beach were flat in July as uncertainty about the International Longshore and Warehouse Union contract negotiations resulted in cargo diversion to East Coast ports.

The Port of Los Angeles reported a year-over-year increase of 0.25 percent in total containerized imports and exports. Imports declined 1.98 percent, and exports increased 3.62 percent.

The Port of Long Beach reported an increase of 3.7 percent in total container volume, with imports up 0.9 percent and exports down 6.2 percent compared to July 2013.

It’s obvious that the contract negotiations between the ILWU and the Pacific Maritime Association are having a direct impact on container traffic at the nation’s largest port complex. Container traffic, especially imports, increased in Los Angeles-Long Beach in the months leading up to the July 1 contract deadline as importers fast-forwarded their shipments in the event there would be a work stoppage.

Negotiators failed to reach a new contract by July 1, although cargo-handling has continued pretty much without interruption at West Coast ports. However, carriers with all-water services to the East Coast report that their ships have been full the past month, and in some instances cargo was “rolled” to subsequent voyages because ships were over‑booked.

Nevertheless, cargo volumes in Los Angeles-Long Beach have held up better than might be expected. The July numbers this year are being compared to a strong July last year. If vessels in the East Coast services remain full during the remainder of the peak shipping season, cargo interests may have to take their chances and continue shipping the bulk of their cargo to the West Coast.

Man-hours paid by employers in Los Angeles-Long Beach indicate that cargo volumes in Southern California will remain strong in August. Numbers posted on the PMA website show that ILWU man-hours paid in the week ending Aug. 8 totaled 433,221, which is up from 389,754 in the same week in 2013.

Two forces could be at work to explain the increased man-hours. Heavy cargo volumes contributed to the increased work opportunities. Also, the ports have been congested because of a shortage of truck capacity, chassis shortages and dislocations, and delays on the intermodal rail networks. Terminal congestion reduces worker productivity, creating a need for more man‑hours.