West Port Labor Talks on ‘Doorstep of a Tentative Agreement’
The Port of Angeles’ top brass believes the long-running West Coast labor talks might soon bear fruit.
“I believe that we’re on the doorstep of a tentative agreement,” executive director Gene Seroka said last week. “Both sides are spending a lot of time at the negotiating table and I’m optimistic we’ll hear good news soon.” A new agreement would be “a welcome development for customers who have been diverting cargo elsewhere” and “send a clear signal of stability” to importers, he added.
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Seroka’s remarks come as the Port of Los Angeles reported falling container volume in April, continuing a downward trend that emerged last fall.
Last month, the port processed 688,110 TEUs—down 22 percent from a year ago, which was its second busiest April on record. Loaded imports fell 25 percent compared to the previous year, reaching 343,689 TEUs, while loaded exports totaled 88,202 TEUs, 12 percent lower than the year prior. Empty containers slowed by 23 percent year over year, landing at 256,220 TEUs.
Following supply chain slowdowns and logistics turmoil, 2022 was the second busiest calendar year in the port’s 116-year history. During the first four months of 2023, the port handled 2,525,204 TEUs—29 percent less than the same period last year. The port facilitated $311 billion in trade, handling 9.9 million containers during 2022.
“The bright spot is we’ve been on an upward trajectory these last two months,” Seroka said. In March, the port saw 28 percent greater TEU volume than February, and April’s voume was 10 percent higher than March. “I believe that this trend will continue in May as we project to reach or exceed 700,000 TEUs for the month,” he said.
Seroka pointed to three factors affecting import and export volumes. “First, we have a cooling global economy along with us concerns about lingering inflation and rising interest rates,” he said. “Second, warehouses remain laden with aging inventory across the country. And third, we have the prolonged West Coast labor negotiations weighing on the marketplace.”
When it comes to the economy, Seroka said stakeholders are seeing “mixed signals with no clear consensus on what lies ahead.” The National Retail Federation’s Global Port Tracker data this month revealed that the first-half slowdown would be steeper than predicted earlier this year and is likely to continue into the third and fourth quarters. One of the largest ocean freight carriers, Maersk, said it had revised its outlook for the rest of the year, citing a difficult operating climate.
While consumers are still buying, demand has softened due to economic anxiety, and the Federal Reserve’s efforts to bring down inflation by raising interest rates have had less of an immediate impact than officials had hoped. “On the other hand, the U.S. had a strong jobs report, and both freight along with energy costs are stabilizing,” Seroka said.
“I’m keeping a very close eye on the Federal Reserve meeting in mid-June,” he added. “The Fed’s next move on interest rates will be an important factor in determining where the economy and trade are headed for the rest of the year.” Seroka noted that the standard inventory replenishment cycle “has yet to kick in” while warehouse space remains hard to get.
Seroka was optimistic about a second-half rebound. “If economic conditions improve and we get a labor deal in place that will definitely help drive our volume here in Los Angeles,” he said. “We’re prepared for the next cargo surge whenever it comes.”