Busiest U.S. port sees record volume ahead of high-stakes labor talks

FILE PHOTO: Stacked containers are shown as ships unload their cargo at the Port of Los Angeles in Los Angeles, California, U.S. November 22, 2021. REUTERS/Mike Blake

LOS ANGELES (Reuters) - The Port of Los Angeles, the nation’s busiest, on Tuesday reported record first-quarter volume as anxiety builds ahead of the July 1 expiration of the labor contract covering some 22,000 West Coast dock workers.

The Port of Los Angeles handles about 40% of U.S. container cargo and is home to more union workers than any of the 29 Pacific Coast ports.

An impasse in the West Coast talks threatens to undo progress at the Port of Los Angeles. Despite a continued flood of imports, workers there are whittling down pandemic-fueled cargo pileups that contributed to inventory shortages, helped drive up consumer prices, and turned the surrounding bay into a parking lot.

The National Retail Federation (NRF) and other groups that depend on West Coast ports like Los Angeles are pressuring the dockworkers’ union and employers to quickly hammer out an agreement to avoid further injury to the world’s battered supply chains.

The International Longshore and Warehouse Union (ILWU), which represents West Coast dockworkers, and the Pacific Maritime Association (PMA), representing employers, are scheduled to kick off talks on May 12 in San Francisco.

Such labor talks are historically fraught. The last round of negotiations in 2014-2015 resulted in an eight-day work stoppage that sapped an estimated $8 billion from the Southern California economy. Service did not recover for roughly nine months.

On Tuesday, Los Angeles port Executive Director Gene Seroka said increased staffing helped slash vessel backups by speeding up cargo movement - even as first-quarter volumes climbed 3.5% to an all-time high of 2.68 million 20-foot equivalent units (TEU).

Meanwhile, bottlenecks are building at Asian ports as outbreaks of a highly contagious Omicron variant disrupt the free flow of trade and threaten to unleash a new wave of global supply chain shocks.

“We’re still facing a global supply chain crisis ... we certainly hope (the West Coast labor negotiation) doesn’t further complicate that ongoing crisis,” Jonathan Gold, vice president supply chain and customs policy at NRF, told Reuters.

Reporting by Lisa Baertlein in Los Angeles; Editing by Richard Chang