The head of the Port of Los Angeles expects labor contract negotiations to be concluded early next year and will step up efforts to attract back lost cargo

The head of the Port of Los Angeles, the busiest port on the U.S. West Coast, expects new labor contracts for dock workers in the region to be reached by early February next year, removing uncertainty for importers and ramping up efforts to drain to the East Coast and Gulf of Mexico. Goods from coastal ports are attracted back.

Gene Seroka, executive director of the Port of Los Angeles, said in an interview a few days ago: "We will complete this work (that is, the new labor agreement for maritime employees on the West Coast) in early 2023. Not in January, it must be in early February." "Then The downside is how much is going to be diverted back because the supply chain is working so well, and how much we really need to get back quickly."

The Port of Los Angeles, historically the busiest in the US, saw cargo volumes drop 25% year-on-year in October, the lowest level since mid-2020, as demand for white goods eased and retailers avoided new labor contracts. Negotiations could cause disruption while turning to other U.S. ports. Negotiations for the new contract are currently in their sixth month.

Members of the International Terminal and Warehouse Union (ILWU) have been working without contracts since their contracts expired on July 1. Seroka said about 20% of cargo volumes had been diverted to other U.S. ports amid fears of port strikes or work stoppages as had occurred in previous negotiations.

Despite the slowdown in business, 2022 will still be the second-busiest year in the port's 115-year history, Seroka said.

To lure lost business back to the West Coast, "we're going to have to do something aggressive, maybe in terms of price, maybe in terms of marketing, maybe in terms of getting commitment so others can follow the bigger, more established company. But we face a challenge, to say the least,” Seroka said.

He added that he "would not be surprised" if 5% of the 20% of shipments that had been diverted did not make it back to the West Coast.

"It's not good, we have to get this right," Seroka said. "One in nine jobs in Southern California and one in fifty jobs in the U.S. depend on this port." There are about 1 million jobs in Southern California. "Everyone here has real power to make that money back, including those who decide how the goods are shipped."