News & Events > Insights

September 20, 2023–When International Longshore and Warehouse Union (ILWU) dockworkers ratified their long-awaited contract in late August, supporters of West Coast ports got a major boost in their efforts to stem the flow of cargo that had been diverted to rival gateways on the East and Gulf Coasts for the better part of a year.

Cargomatic President Ed Aldridge welcomed the ratification of the contract, drawing attention to the heroic efforts of dockworkers during the pandemic.

“The ILWU workers were America’s true heroes during the pandemic by keeping America moving,” Aldridge said. “The ratification of the contract should absolutely mean more West Coast volumes for all of our supply chain partners and thereby make more cargo available on a consistent basis for Cargomatic.”  

Jim McKenna, President and CEO of the Pacific Maritime Association which represents the shipping lines and marine terminal operators that employ the dockworkers said the “contract provides an important framework for the hard work ahead to overcome new competitive challenges and to continue to position the West Coast ports as destinations of choice for shippers worldwide.” 

Port of Los Angeles Executive Director Gene Seroka agreed, saying that the ratified contract brings “long-term stability and confidence to our customers as we redouble our efforts to bring more cargo back to the Port of Los Angeles, the premier gateway to and from the Pacific Rim.”

Still, Seroka was realistic about the prospects, commenting at a press conference in July that—even with the contract—not all of the “lost cargo” will return. “The ships don’t just turn on their left-hand blinker and make a left turn back to Los Angeles. It takes a little bit of work,” Seroka said. “It’s still a relationship-based business.”

The competitive challenges facing the West Coast ports have been underlined by increasing low containerized throughput volumes for much of the past year, particularly in the face of challenges from their competitors on the East and Gulf Coasts.

“The Port of New York and New Jersey is again No. 1 in the nation,” said Port Authority Chairman Kevin O’Toole in April. “We expect a stronger second half of the year, as we have been in discussions with many importers that shifted volume to us from elsewhere and are now committed to keeping that volume in our gateway.”

That theme was sounded again more recently when the Port of New York New Jersey proclaimed itself the nation’s busiest port for the month of July, moving 725,479 TEUs, the gateway’s highest total since October 2022.

PNYNJ’s July numbers were considerably higher than either of its main rivals on the West Coast, with the Port of Long Beach reporting throughput of 578,249 TEUs and Los Angeles 684,291 TEUs—about 25% and 6% lower than their East Coast competitor year over year in July. 

In terms of year-to-date numbers, PNYNJ came in at the number two spot in the nation, seeing some 4,465,823 TEUs compared to national leader Los Angeles, which posted 4,821,670 TEUs. Port of Long Beach took the third spot in the nation with 4,310,925 TEUs. 

Still the July year-over-year result gave PNYNJ full bragging rights, and officials were quick to use them. 

“The strong performance in July resulted in the Port of New York and New Jersey leapfrogging over other U.S. ports,” PNYNJ said in a statement. “The increase also reflects shipping companies’ continued confidence in operational reliability and speed at the New York-New Jersey gateway.”

But ratification of the dockworkers’ contract could see that situation begin to change as many observers attributed the rise of cargo throughput on the East and Gulf Coasts to a diversionary tactic of wary shippers seeking to avoid possible slow-downs or even work stoppages by West Coast dockworkers.

Aldridge also felt that the ratification will have a positive impact on the return to the West Coast of cargoes that have been diverted to the East and Gulf Coasts. 

“Over time we will see a significant portion return to the West Coast, but a portion of the previous volumes will permanently remain moving over the East Coast and Gulf ports. However, you can also bet on the West Coast port directors to be very aggressive in the marketplace over the coming months to attempt to lure the business back.” 

Aldridge does not think the ratified contract means a return to business as usual for the West Coast or the country as a whole. Instead, he sees a future in which ports along the East and Gulf Coasts are developing to meet changes now taking place in the country. 

“The East Coast and Gulf ports are building infrastructure for the future, and the cargo will be growing there going forward to support the shift in supply chains and U.S. demographics. I also have full confidence in the American consumer that healthy volumes will return over all ports in time.”  

The new labor contract, also approved by PMA member companies, is retroactive to July 1, 2022 and runs through July 1, 2028.

Photo Credit: Descartes Datamyne