Business

Fear of work stoppage leads to cargo surge at local ports

Afraid of a dockworker strike, retailers rushed goods into ports, causing a surge in L.A. and Long Beach
Cargo traffic is rising at the ports of L.A. and Long Beach, which handle about 40% of U.S. imports

The Port of Los Angeles had its busiest June ever, and neighboring Long Beach hasn't handled so much cargo in June since before the recession.

But the influx of cargo containers had less to do with economic improvement than retailers' worries about beating a possible dockworkers' strike or lockout, experts said.

Nearly 20,000 dockworkers at 29 West Coast ports are now loading and unloading cargo containers from Asia and elsewhere without a contract. A six-year agreement with employers expired July 1. Negotiations are underway for a new deal.

Fearful a breakdown in talks could shut West Coast ports, retailers rushed goods into the country before the contract expired, not wanting to be left emptyhanded during the busy back-to-school and holiday seasons, experts said.

"You don't want customers flocking into your store on Halloween and not finding any cheap jack-o-lanterns and costumes ... because those items are sitting on ships languishing off the West Coast," said Jock O'Connell, an international trade economist who follows the ports.

The longshoremen, shipping lines and cargo terminal operators have vowed to keep freight moving until an agreement is reached. Union spokesman Craig Merrilees said the shipping increases are driven, in part, by anti-union retail and manufacturing lobbyists who have whipped up "hysteria" at contract time.

Either way, traffic is rising at the twin ports, which handle about 40% of U.S. imports. Cargo flows have been increasing for months, to beat the July 1 contract deadline, O'Connell said.

Last month, the Los Angeles port moved 736,438 container units, the busiest June on record and a 14% increase from a year earlier, the port said this week. Neighboring Long Beach saw cargo traffic (including imports, exports and empty containers) surge 8% from a year earlier, making last month the busiest June since 2007.

Imports at Long Beach jumped 8.8%. At L.A., they skyrocketed 17%.

Port of Los Angeles spokeswoman Rachel Campbell said some larger-than-normal ships called at the harbor in June, helping boost numbers. But the sharp rise was largely because of concerns over the labor talks, she said.

The flood will likely provide a short-term economic boost for Southern California's important logistics industry, O'Connell said. Daily, legions of workers haul traffic from the ports to massive warehouses in the Inland Empire, where warehouse workers unload the goods before they are shipped across the country.

"We are extremely busy," said Robert Curry, president of California Cartage Co., a trucking firm that serves the two ports.

The recent surge has amplified long-running congestion problems, Curry said. In the last week, customers started offering a premium for Cartage to pick up their goods instead of other firms' cargo.

But O'Connell doesn't expect the cargo rush to last.

"The goods that are being brought in prematurely right now are goods that would have normally come in over the course of the next two or three months," he said.

In 2002, talks broke down between the International Longshore and Warehouse Union and the Pacific Maritime Assn., which represents employers, leading to a 10-day lockout that briefly crippled international trade along the West Coast.

Neither side is discussing how this year's talks are going, but, at least publicly, the negotiations appear amicable.

andrew.khouri@latimes.com

Twitter: @khouriandrew

Copyright © 2014, Los Angeles Times
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