Cargo Spikes Amid Shutdown Worries

The ports of Los Angeles and Long Beach reported a significant surge in cargo flow last month, mostly fueled by retailers’ fears of a potential work stoppage. In Los Angeles, cargo volumes were up 13.9% in June, year-over-year, to 736,438 container units, while Long Beach saw an 8% rise, with 610,516 units. Overall, about 40% of U.S. imports, including some promotional items, pass through several West Coast ports. The sites have been seeing traffic increases over the last few months in anticipation of the much-publicized labor contract affecting dockworkers expiring.

Nearly 20,000 dockworkers at 29 West Coast ports have been working without a new deal since July 1. Experts say retailers have been rushing goods into the country, not wanting to risk being out of stock during the busy back-to-school and holiday seasons.

The International Longshore and Warehouse Union (ILWU), which represents dockworkers, and the Pacific Maritime Association (PMA), which represents port operators, have been negotiating a new contract since May. Among the issues under review are wages, jurisdictional claims and health-care costs. In a joint press release, both sides stressed their commitment to getting a contract signed without a business disruption. “While there is not a contract extension in place, both parties have pledged to keep cargo moving,” according to the joint release.

Even a short port strike could have far-reaching consequences for the U.S. economy, analysts say. Reports from trade groups show that a 10-day work stoppage would cost the country $21 billion and 169,000 jobs.