Did Gene Seroka finally figure the Port of Los Angeles out?

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Look at this! 

The backlog of cargo ships at the port of LA-Long Beach has dropped dramatically. Just a few months ago, the West coast bottlenecks symbolized intractable supply-chain problems. Hundreds of ships waiting to unload cargo became the most enduring image of the Covid-19 supply chain crisis.  The backlog pushed up ocean freight rates and ignited widespread inflation that afflicts economies around the world. 

But now, the West port disruptions appear over. 

However, before celebrating LA’s astonishing turnaround, let’s examine the queues in alternative ports. After all, LA is not the only port – albeit the main one. Companies responded to the West coast bottlenecks by diverting loads to the East and the Gulf coasts. 

The next chart (using slightly different metrics) shows the consequences of this adjustment. In late 2021, – when the LA port queues reached record highs – the number of containerships anchored off Eastern ports began to rise. And they are still rising today. The Gulf ports exhibit a similar, though more modest, pattern.

This begs the question: If containerships did not adjust – did not reroute through East and Gulf coast ports – would LA-Long Beach queues still be at record highs? Undoubtedly, Port of LA Executive Director Gene Seroka would say no. But the data strongly suggest West coast record low queues are due mainly to ships diverting cargo as opposed to LA-Long Beach reorganization and increased efficiency. 

Shippers are in fact unlikely to forget the turmoil and dysfunction experienced in LA. For that reason, Seroka is back in the news pointing the finger at the East and Gulf ports:  “at many other ports around the country, ships are waiting for space… For cargo owners looking to re-chart their course, come to Los Angeles.”

Will they return? Seroka hopes so. But only time will tell. For now, it’s clear the East and Gulf coast ports threaten West coast domination.

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