Concerns Persist About the Future of the West Coast Ports - Sobel Network Shipping Co., Inc.

Concerns Persist About the Future of the West Coast Ports

Almost a third of logistics managers have shown concern over the return of trade to the West Coast after a labor deal is reached between the Warehouse Union and the International Longshore. In a CNBC report, they found that 18% of respondents were willing to only bring back 10% of diverted trade. An additional 12% said they would bring back 20% of the trade they had previously taken away. Around 12% were willing to bring back 50% of their trade.

The survey focused on questions presented to 341 logistics managers who all members of were:

  • National Retail Federation
  • Council of Supply Chain Management Professions
  • Agriculture Transportation Coalition
  • Pacific Coast Council
  • Coalition of New England Companies for Trade
  • American Apparel and Footwear Association

49% of those surveyed had not diverted trade and 40% had diverted trade.

Why was trade moved away from the West Coast? The threat of the ILWU strike was the main reason followed by California’s AB5 gig worker law which focuses on rail delays and the status of drivers.

Negotiations between the Pacific Maritime Association and the ILWU have going on since May 10. 2022. The Port of New York and New Jersey have benefited greatly from the diversion of trade and have taken the lead in the nation by quickly unseating the Port of Los Angeles.

Trade has transferred from the West Coast to the Gulf ports and the East Coast ports. The East Coast warehouse has also greatly benefited. In addition, the large railroads Norfolk Southern and CSX that service the posts have also experienced a significant uptick in business. In 2022, the amount of freight leaving the East Coast has doubled compared to the West Coast. The report by CNBD also revealed that over 50% of logistics managers do not believe that the supply chain will return to normal until 2024 or later.

  • The Port of Los Angeles moved 4.6 million loaded import twenty-foot equivalent units (TEUs) valued at around $282 billion.
  • The Port of New York and New Jersey moved 4.5 million TEUs with a value of around $274.6 billion. The value of each container was around $61,000.

In September, the Port of New York and New Jersey moved into first place by surpassing the Port of Los Angeles.