LONG BEACH, May 10 – THE US trucking industry will have a watchful eye on negotiations that begin on May 10 between the West Coast dockworkers’ union and their employer, especially given the expected surge of imports once China’s Covid restrictions ease up.
Those concerns aren’t restricted to one coastline or the other, a point stressed by Jonathan Gold, Vice President for Supply Chain and Customs Policy at the National Retail Federation.
“As we entered 2022, the biggest question was when the supply chain would return to normal,” Mr. Gold said. “Unfortunately, we still don’t have a definitive answer.”
Congestion on the West Coast has “eased” but now is growing along the East Coast. “Ports aren’t as overwhelmed as they were a year ago, but they are still significantly busy moving near-record volumes of cargo,” he said.
Still, the general expectation is that the lockdowns in China are creating a gap in manufacturing and deliveries to the nation’s leading export terminals, especially in and around Shanghai.
“Tsunami of ships” expected
That gap does translate into a dip in imports, but the prevailing belief is that – once lockdowns are lifted – the US could see a “tsunami” of cargo ships coming across the Pacific as earlier predicted by Cargomatic.
Mario Cordero, Executive Director of the Port of Long Beach, noted that his port is seeing a “slowdown” in cargo volume due to the restrictions in Shanghai but that could end soon.
“We would expect to eventually see a corresponding uptick or even a slight surge in cargo volume as the supply chain would be expected to catch up,” he told Transport Topics.
Gene Seroka, Executive Director of the Port of Los Angeles agrees: “While conditions could change, I don’t foresee a bust coming in Trans-Pacific trade. More likely, we may see a lull in volume with a fairly quick bounce back when the lockdowns end.”
How long a “lull”?
The question, of course, is precisely how long that “lull” will last. Peter Sand, the Chief Analyst of Xeneta, Ocean, and Air Freight Rate Consultants, predicted a four-to-eight-week lull.
“Our expectations for the coming weeks and months, especially around Shanghai, is that this is going to take quite some time. My own expectations are for this to gradually ease over a period of time, say four to eight weeks,” Mr. Sand said in the third week of April.
Ironically enough, that period extends to the end of June, coinciding with the deadline for the completion of a contract between the International Longshore & Warehouse Union and their employers as represented by the Pacific Maritime Association.
Jim McKenna, President and Chief Executive of the PMA, is highly aware of that coincidence.
“If China kicks loose and starts sending those 500 ships that are sitting there back at us, we’re going to see a really big surge and we have to realize that and do what we can to get to the table, get a contract, get the agreement and do so without any further disruption,” he said.
“Lull” coincides with labor talks
Still, Mr. McKenna believes that both sides are entering the negotiations in good faith and that whether or not the deadline is met, throughput will continue.
“I think everybody is optimistic going into this one that we’re going get to where we need to,” he said. “Whether we go past July 1st or not is not the issue. It’s just, we need to stay at the table and get an agreement without causing any further disruptions.”
ILWU International President Willie Adams expressed similar optimism, downplaying press speculation about conflict between the two sides, stating instead that “the men and women of the ILWU are looking forward to the opportunity to meet with the employers and seek a contract that honors, respects, and protects good American jobs.”
In a promising show of agreement at the outset of negotiations, the two sides issued a joint statement on May 9, declaring that “they expect cargo to keep moving until an agreement is reached.”
Port access eased for truckers
Absent any disruptions, ports around the country are gearing up to handle that expected flood of cargo that could come at any time in the coming weeks and truckers will be needed to handle that cargo, a point stressed by the Port of Long Beach.
“Truck drivers are an essential link in the supply chain and we want to give them every opportunity to obtain access to the Port,” said Mr. Cordero, in announcing help with registration procedures on May 24-26.
“We’re happy to accommodate the trucking community by bringing the registration process directly to the Port,” said Long Beach Harbor Commission President Steven Neal. “We hope this event provides a convenient and easy way to get the clearances they need.”
Given the expected surge in cargo, the ports will need all of the truckers they can find.
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