After months of pandemic-influenced congestion at maritime ports along the U.S. West Coast, the vessel backups in the San Pedro Bay off the Ports of Los Angeles and Long Beach cleared in late 2022. As ocean freight rates dropped in early 2023, shippers were hopeful of a return to normal and a drama-free peak season.
Those hopes are fading.
As peak season approaches, fresh labor-related port disruptions along the West Coast have replaced the pandemic-influenced congestion that characterized the past three years.
On Friday, June 2, many West Coast dockworkers no-showed for work, forcing a pause in terminal operations due to insufficient labor. Negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) have been ongoing, and the no-show by members of the ILWU is just the latest in a string of incidents that have retailers and other shippers calling on the president to intervene.
Retailers, other shippers and the logistics service providers (LSPs) that work with them are among the most affected by this ongoing labor dispute. Vizion’s proprietary data shows just how widespread the impact may be, including repercussions for shippers and their consignees, as well as the West Coast ports and terminals that had been clawing back market share from the U.S.’s East Coast ports this year — until this latest disruption.
Continue reading for a look at the numbers behind the West Coast labor disruption, including downloadable data sets, as well as an exploration of the impact on shippers, LSPs and others in the supply chain space.
The West Coast Labor Disruption By the Numbers
The following chart shows a sample of 17 vessels that berthed at either the Port of Los Angeles or Long Beach between Thursday, June 1 and Thursday, June 8. The chart includes:
- The clearance rate (percentage of discharged containers that have also gated out)
- The time at berth (how long in days the vessel has been at berth)
- Predicted time at berth (expected time at berth based on historical data)
- Whether or not the vessel remained at berth as of Thursday afternoon
Many of the vessels still at Long Beach and Los Angeles have already exceeded their expected time at berth. For example, at TTI, the largest terminal at Long Beach and one of the operations most affected by the labor disruption, the Hyundai Mars has been at berth more than two days longer than expected based on historical data.
One terminal operator told the Wall Street Journal that operations “are moving at half the velocity we normally operate with,” which would explain the comparative shortfall in clearance rate.
Related to low clearance rates, the average amount of time vessels are spending at berth at West Coast ports has steadily ticked up over the past week — particularly at Long Beach. This chart reflects the 7-day rolling average amount of time (in days) that any vessel spends at berth before departing these 5 West Coast ports:
As the labor issues persist, it’s possible that these vessels remain at berth for increasingly longer periods of time. As of Thursday afternoon, Vizion is tracking an additional 48 vessels that are heading to the Ports of Long Beach and Los Angeles. This chart shows you how close each vessel is to its destination port along with the number of TEU its carrying:
This table details the individual vessels that are currently heading toward Long Beach and Los Angeles, including information on the specific terminals where the vessels are expected to arrive:
FreightWaves reported this week that ILWU President Willie Adams insists that “reports that negotiations have broken down are false,” which provides a glimmer of hope that both sides can reach a resolution quickly. That said, the ongoing nature of these labor talks undermines that hope.
Without a quick resolution to the labor issues, these West Coast ports run the risk of a pandemic-like backlog of ships in the San Pedro Bay waiting for the opportunity to berth and unload. There’s no indication that carriers are planning to blank sail these affected ports as of now, but that could change at any moment.
The Cargo Owners With Containers Stuck on the West Coast
Large retailers are among the parties most exposed during a prolonged labor disruption at West Coast ports. According to Reuters, the retail industry accounts for roughly half of all volume at U.S. container ports, and many of those retailers are currently planning inventory for the busy back-to-school and holiday seasons.
Heavy exposure to supply chain disruptions is why the retail industry is petitioning the federal government to get involved. “We urge the administration to mediate to ensure the parties quickly finalize a new contract without additional disruptions,” said David French, senior vice president of government relations at the National Retail Federation, as reported by Reuters.
Publicly accessible customs data includes named parties, indicating the cargo owners who currently have containers at terminals within the Ports of Long Beach and Los Angeles. Those cargo owners include:
- Adidas International Trading AG
- Batteries Plus LLC
- Dell Products LP
- Dollar General Corporation
- H&M Hennes and Mauritz L.P.
- IKEA Supply AG
- LG Electronics U.S.A., Inc.
- Living Spaces Furniture LLC
- Nitto Tire U.S.A. Inc.
- Old Navy, LLC
- Oracle America, Inc.
- Procter & Gamble Manufacturing
- Rubbermaid Consumer Products
- Samsung Electronics America, Inc.
- Tesla, Inc.
- The Gap, Inc.
- Toms Shoes
Access the complete data set of named parties with containers at Long Beach and Los Angeles as of Thursday. The list may include duplicates due to various naming conventions used by different data sources.
West Coast vs. East Coast Market Share
From October 2022 to February 2023, the U.S.’s East Coast ports imported at least 11.2% more TEU than their counterparts on the West Coast. During that time, West Coast port authorities made public statements about earning back volume that was lost during the period of pandemic-related congestion and the labor issues that have gone unresolved over the past year.
West Coast ports had indeed started winning back market share in late winter and early spring, cutting their deficit to 6.2% in March, 6.7% in April and 4.7% in May. The resumption of labor issues and the resulting disruptions could throttle the progress of West Coast ports in winning back business lost in recent years.
The chart above shows how the East Coast’s advantage over the West Coast ballooned to 15.6% in October 2022 (698,955 TEU for the East Coast and 510,429 TEU for the West Coast). That advantage shrunk continually across March, April and May of 2023, with the East Coast processing 623,712 TEU of imports last month compared to a competitive 567,233 TEU of imports for the West Coast. These numbers do not reflect the share of TEU imported by Gulf Coast ports like Houston and Mobile.
Another ongoing supply chain disruption could affect shippers’ collective ability to choose between importing to the U.S. East Coast vs. the West Coast. Drought conditions have lowered water levels in the Panama Canal, leading to the implementation of surcharges and vessel capacity limits. Labor strife on the West Coast can lead to increased shipping rates independently. When coupled with issues along the Panama Canal that limit shipper options, the chance for higher rates increases.
The Environmental Impact of Supply Chain Disruptions
The ongoing labor dispute at West Coast ports means a slowdown in the flow of trade, but there are also ripple effects in other areas — including the environmental impact.
An emission inventory report released last year by Long Beach found that the pandemic-induced port congestion resulted in a sharp increase in emissions, halting the progress of the port’s otherwise downward trending emissions output. With supply chain disruptions causing a backlog of ships anchored near the coast, the subsequent idle emissions added significantly to the environmental burden.
To put it into perspective, last year's greenhouse gas emissions were 22% above the levels of 2005, the port's chosen baseline year, just before the adoption of the original San Pedro Bay Clean Air Action Plan. By contrast, the previous inventory report indicated emissions were 10% below the 2005 baseline.
In 2017, Long Beach and Los Angeles committed to zero-emissions technology by 2030 and zero-emissions trucks by 2035. The pandemic's impact was clearly an unexpected setback in the otherwise promising path towards emissions reduction. The longer the current labor dispute drags out, and the more congested these ports become, the higher the environmental burden is likely to be.
A Never-Ending Cycle: The Many Sources of Supply Chain Disruptions
In the complex and interconnected world of logistics, supply chain disruptions can come from any number of sources. By understanding the breadth of these potential disturbances, we can better prepare ourselves to navigate such challenges when they arise. Here are some of the many sources of supply chain disruptions:
- Labor: Disagreements between labor unions and management can lead to strikes, no-shows and other disruptions, as we’ve seen this week. Even before the most recent turmoil between the ILWU and PMA, news stories have described the impact of ongoing labor strife on agriculture, red meat and other industries. Other regions around the world are not immune to labor issues, as evidenced by strikes in the U.K. in 2022.
- Weather: Weather events, including flooding in South Florida, typhoons in East Asia, hurricanes in the Caribbean, and drought affecting inland waterways, have disrupted the global supply chain in recent months.
- Holidays: National holidays and large cultural events like the Chinese New Year and the Eid holiday in Bangladesh can create a backlog at ports as activities slow down or halt during these periods.
- Geo-Politics: Geopolitical risks can quickly change trade routes and costs, as seen with the equalization of rates from Shanghai to Taiwan and Los Angeles due to geopolitical risk, and the drop in grain exports from Ukraine to developing nations due to the ongoing war with Russia.
- Infrastructure: Technology plays a crucial role in modern logistics, but when it fails, as happened when Kenya's electronic customs portal went down, it can leave cargo stranded and operations in disarray.
- Accidents: Accidents like the March 2021 blockage of the Suez Canal can have a massive ripple effect on the global supply chain, showcasing how one unexpected event can disrupt global trade.
- Black Swan Events: These are highly unpredictable events like the COVID-19 pandemic. Such incidents, impossible to foresee, can initially close ports and subsequently lead to a surge in trade volume, resulting in high levels of congestion.
Each of these disruption sources underscores the need for adaptive strategies and robust data in managing our supply chains. As we continue to navigate the ever-changing landscape of global logistics, Vizion is committed to providing you with the insights and data you need to steer your operations confidently and effectively.
Sidestep Supply Chain Disruptions With Vizion
Late last week, few could have anticipated dockworkers no-showing their jobs on the West Coast, leaving terminals to scramble for labor to process containers.
This week it was labor issues disrupting the global supply chain.
Next week it could be severe weather.
And weeks into the future it could be another Suez Canal blockage or some other Black Swan event.
The sources of supply chain disruptions are myriad and unexpected. As they emerge, Vizion helps users take action to keep their supply chains moving forward at peak potential.
Use our container tracking API to add accurate location updates and ETAs to your ERP, TMS or other software system. Our API normalizes data from multiple sources for fast, confident decision-making, and those sources are already connected, giving you instant-on capabilities.
This month, we will add Intermodal Rail Tracking to our existing ocean freight tracking solution. Use our direct connections to 60-plus ports and terminals worldwide as well as direct connections to the 7 Class I railways in North America to track your containers, optimize the transition from sea to land, and to avoid costly demurrage fees.
We also offer a port performance solution that empowers you to monitor efficiency at the ports most important to your business — and to redirect cargo as disruptions emerge.