Slowdown at West Coast Ports Causes Surge in Container Backlog

The International Longshore and Warehouse Union workforce at West Coast ports has been moving at a “slow and go” pace, which has significantly slowed ground port productivity. As a result, supply chain intelligence company MarineTraffic has revealed a “significant surge” in the average number of containers waiting outside of port limits. The value of the combined 86,381 containers floating off the ports of Oakland, Los Angeles, and Long Beach reached $5.2 billion, based on a $61,000 value per container, and customs data.

Port Backlogs and Slowing Productivity

According to data exclusively pulled for HaberTusba by Vizion, which tracks container shipments, the seven-day rate for a container cleared through the Port of Oakland is operating at 58%; at Port of Long Beach it is 64%; and at Port of Los Angeles it is 62%. Logistics managers with knowledge of the way the union rank-and-file displeased with unresolved issues in negotiations with port management are influencing work shifts tell HaberTusba the slowdown can be attributed to skilled labor not showing up for work.

Union Influence on Work Shifts

HaberTusba has also learned that at select port terminals, requests for additional work made through official work orders are not being placed on the wall of the union hall for fulfillment. The Pacific Maritime Association, which negotiates on behalf of the ports, is not allowed in the union hall to see if the terminal orders are indeed being requested. The PMA said in a statement on Friday afternoon that between June 2 and June 7, the ILWU at the Ports of Los Angeles and Long Beach refused to dispatch lashers who secure cargo for trans-Pacific voyages and unfasten cargo after ships arrive. “Without this vital function, ships sit idle and cannot be loaded or unloaded, leaving American exports sitting at the docks unable to reach their destination,” the statement read.

Truck and Container Backups

The average truck turns to go in and out of the West Coast ports are up. Shippers are becoming increasingly concerned about the potential need to find alternative supply chain options. The PMA said in its statement that even though some port operations have improved, “the ILWU’s repeated disruptive work actions at strategic ports along the West Coast are increasingly causing companies to divert cargo to more customer-friendly and reliable locations along the Gulf and East Coasts.”

Impact on Supply Chain Costs

Supply chain costs have come down considerably on a global basis, according to the Federal Reserve’s data, though they have been mentioned by Fed Chair Jerome Powell as one inflationary trigger the central bank has no control over. In a report by Georgetown economist Jonathan Ostry, the spike in shipping costs increased inflation by more than two percentage points in 2022.