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CMA CGM Atilla working at T-18, 1 March 2012. at the port of Seattle

Diversions still stinging West Coast ports

Bill Mongelluzzo

Container traffic at West Coast ports was down 2 percent in May from the same month last year as importers and exporters who had diverted cargo to other ports during the lengthy period of labor disruptions and port congestion did not return all of their business to the West Coast.

According to numbers published Wednesday on the website of the Pacific Maritime Association, imports increased 2 percent in May year-over-year. The total West Coast volumes were dragged down by exports, which declined 6 percent compared to May 2014.

U.S. exports have declined for more than a year now due to the strong dollar and the weak economies among some major trading partners in Asia, Europe and Latin America. PMA’s numbers are for loaded containers.

It is apparent that West Coast ports continue to pay a price for the International Longshore and Warehouse Union work slowdowns and the Pacific Maritime Association retaliation in the form of reduced night and weekend work, all of which added to severe port congestion during contract negotiations. The back-and-forth continued until a tentative agreement was reached on Feb. 20.

Although port congestion problems lingered for the ensuing two months, it dissipated steadily and West Coast ports were mostly back to normal by mid-May. Cargo interests, especially national retailers and other large importers with distribution facilities on the East Coast, nevertheless continued to divert cargo away from the West Coast.

That is evident by the fact that strong container growth at East and Gulf Coast ports shows no signs of letting up. At the Port of Houston, for example, container volumes this year are up 30 percent. Savannah in April reported a record month, with container volumes up 25 percent. Other East Coast ports including New York-New Jersey and Charleston also reported year-over-year increases in container volumes in double digits or high single digits.

In the first quarter of 2015, East Coast ports increased their share of total U.S. containerized imports by 5 percent, and the West Coast market share declined 5 percent in that period, according to PIERS, a sister company JOC.com within IHS Maritime and Trade.

Another disconcerting trend found on the PMA website is that although the total container volume at West Coast ports declined 2 percent in May, the total number of ILWU man-hours paid to move that cargo increased 9 percent in the four-week period ending June 5.

Generally, when ports are congested, the number of man-hours paid to move the containers increases. However, when congestion is alleviated and terminal operations return to normal, which employers say is the case now, productivity and by extension, man-hours paid, should also return to normal.

Year-to-date container volumes at West Coast ports have still not caught up with the January-through-May numbers in 2014. Total container volume is down 7 percent. Imports declined 2 percent and exports are down 15 percent year-to-date.

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