Shipping containers are unloaded from a container ship in the Port of Los Angeles before US President Joe Biden delivers a statement at the Battleship USS Iowa Museum on June 10, 2022 in Los Angeles, California.
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Nearly a third of logistics managers at major companies and trade groups say they don’t know how much business they’ll do on the West Coast after the International Longshore and Warehouse Union, or ILWU, labor deal, according to a CNBC supply chain survey.
Eighteen percent of respondents said they would bring back 10% of their diverted business, another 12% said they would bring back 20%, and another 12% were more enthusiastic, saying they would bring back 60%. His diverted business.
The survey questioned 341 logistics managers in the week of December 12-19 from companies that are members of the National Retail Federation, the American Apparel and Footwear Association, the Council of Supply Chain Management Professionals, the Pacific Coast Council, the Agricultural Transportation Coalition and Huh. Alliance of New England Companies for Business.
49% of those surveyed said they did not divert business, while 40% said they did.
More than half of those respondents told CNBC that the threat of an ILWU strike was the main reason driving business away from the West Coast. Nearly 40% cited both California’s AB5 “gig worker” law, which deals with drivers’ employment status, and rail delays. Respondents could list a number of reasons for business diversion.
Negotiations between the ILWU and their employer, the Pacific Maritime Association, have been ongoing since May 10. one of these biggest winner Ports in New York and New Jersey have taken the top spot in the country, knocking the Port of Los Angeles into second or third place, depending on the month, in terms of trade.
Unresolved fear has shifted trade away from the West Coast towards the East Coast and Gulf ports. This has benefited East Coast warehouses as well as the two major railroads that serve the ports seeing a boom in containers, csx And Norfolk Southern. According to ITS Logistics, which tracks rail cargo trends, the amount of freight traffic from the East Coast doubles that of the West Coast.
Of those surveyed, more than half Logistics managers surveyed by CNBC do not expect supply chains to return to normal until 2024 or later.
From January to November, 4.6 million weighted twenty-foot equivalent units, or TEUs, were imported, with a total value of approximately $282 billion moved through the Port of Los Angeles. This is compared to the Ports of New York and New Jersey, which processed 4.5 million TEUs with a value of $274.6 billion during the same time frame. Based on customs data, the value of a container entering the ports is approximately $61,000.
The Port of New York and New Jersey took the number one slot in processing containers in September.