Port of Los Angeles’ October container volume plummets as labour talks drag on

Container volumes at the Port of Los Angeles for October have dropped from a year ago as labour negotiations at North America’s largest port pushed shipments to East Coast ports.

Negotiations began in mid-May between the 22,000 members of the International Longshore and Warehouse Union, who have not had a labour contract since July, and the Pacific Maritime Association, which represents 70 employers at 29 West Coast port terminals on the West Coast.

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No strike is expected, but shippers are concerned due to disruptions during past negotiations and potential impacts on costs and schedules during a time of high inflation.

The port handled 678,020 teu of containerised goods in October, down 25% from a year ago 22% below the port’s five-year average for October, according to executive director Gene Seroka. Imports came in at 336,000 teu, down 28% year on year.

“In all it’s the lowest October volume we’ve handled since 2009 yet year to date we’re tracking at 8.5m teu, which is only about 6% off or last year’s running all-time record,” he said on Tuesday during a press conference.

“There are three basic factors with the steep decline. The biggest is cargo that has shifted to the eastern Gulf Coast due to protracted labor negotiations.”

He said shippers moving Christmas deliveries up to June and July instead of holding them in October and November as usual and a large increase in appliances and furniture purchases during Covid-19 also led to less volumes for October.

“Consumers just don’t buy those types of products every year,” he said.

“All of these factors combined with inflation interest rates and concerns about a recession tell more nuanced story of what we’re up against today.”

As a result of the lower volumes, the port is eager to get more containers coming in, especially since its terminals are at only about 70% of capacity, he said.

“We’ve got to get that cargo back,” Seroka said.

“We’ll do everything in our power to make sure that happens because when it’s working right the best route between Asia and the US comes straight through the port of LA.”

The port and the unions should be able to come to an agreement soon because the two sides have done so many times in the past, Los Angeles Eric Garcetti said during the press conference.

“There will be a resolution. I know the players, I know their hearts I know they’ve got some issues that are worked out and sometimes seem dramatic at the end, but I have great confidence in them,” he said.