Is the ‘Cargo Pendulum’ swinging back to West Coast Ports?

After years of losing market share to East and Gulf Coast ports, U.S. West Coast ports are increasing their market share of imported goods in 2024, according to data provided by the Pacific Merchant Shipping Association (PMSA).

This follows the recent longshore strike; the huge 61% wage increase and the still unresolved issue of automation between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) which represents employers at U.S. East and Gulf ports.

West Coast Ports Gain Market Share In 2024

The most recent PMSA data contained in the October West Coast Trade Report notes that as of August 2024, U.S. West Coast (USWC) ports increased their market share in 2024 to 43.4% compared to 40.4% of U.S. imports in 2019. In terms of trade with East Asia, the West Coast ports’ market share is 65% in August 2024 which is unchanged since August 2019.

In both cases, the West Coast ports’ market share numbers still trail market share numbers posted in 2014.

The two tables below tell the story. Note: LA/LB = Los Angeles/Long Beach

Shares of Total U.S. Mainland Ports Containerized Import Value

Shares of U.S. Mainland Ports Containerized Import Value with East Asia

Retailers’ Priority Is Port Stability & Productivity

At the Port of Los Angeles media briefing on October 18^th, Matt Shay, President and CEO of the National Retail Federation (NRF) was asked whether there was evidence of a shift of some cargoes from the East and Gulf Coasts back to West Coast ports following the ILA strike and the 61% wage increase agreement.

Shay said he hoped labor stability would be restored between ILA and USMX but said a top priority for retailers was stability: “I think the view of … retailers … is we certainly encourage the ILA and the USMX to get to the table, get a new deal and create certainty or at least stability, predictability for shippers so that retailers and others have a sense of what's happening … we've seen (and the data supports) that people have been hedging a bit because of the uncertainty. And there's nothing worse than uncertainty when it comes to forecasting and forward planning. So … we want to focus on supply chain resiliency and continue to support a comprehensive approach to resolving the issues.”

However, Shay also indicated that he supports efforts by terminals to ‘modernize’ operations that may be opposed by the ILA which opposes automation: “I think … you've got to consider a future in which ports are able to modernize and be able to handle increasing cargo volumes.”

At the Port of Los Angeles, two terminals have automated operations.

Shay praised the Port of Los Angeles’ efforts at improving operations and having done “a masterful job … through their foresight and planning of delivering stability in the face of increased numbers. And that's remarkable. And everyone benefits from that … We know that we're operating in a global marketplace, and we can't sit still relative to what's happening in the market around the world. So, all these issues I think have to be considered, and we'll continue to encourage the parties (ILA and USMX) to resolve those issues constructively.”

Shippers Hedge Against Risk

Eugene Seroka, Executive Director, Port of Los Angeles was also asked whether he saw a shift in cargo patterns and he responded that there had been a ‘hedge’ in moving cargoes through West Coast ports, particularly the Ports of Long Beach and Los Angeles: “And for months on end, now dating back to last year on a trip to Asia … cargo owners started to tell me they would take fractional amounts of their allocation and shift them towards the West Coast, specifically LA and Long Beach as a hedge to the issues that were happening, whether it was a protracted labor negotiation, the drought conditions in the Panama Canal, or the ongoing security concerns in the Red Sea. All of that underscored by a very strong U.S. economy, continues to bring elevated levels of cargo to us... So, no change at this point, but we're out there. We're working, we're talking to as many people as possible.”