Port of Los Angeles processed 939,597 TEUs in July

The Port of Los Angeles processed 939,597 Twenty-Foot Unit (TEUs) containers in July 2024, an increase over the 684,291 TEUs it processed in July 2023, according to Eugene Seroka, Executive Director, Port of Los Angeles.

In his August 13^th media briefing, Seroka reported:

• The Port of Los Angeles’s had imports of 501,276 TEUs in contrast to July 2023 when imports only totaled 364,208 TEUs.
• The Port exported 114,889 TEUs in July, in contrast to 110,372 TEUs in July 2023.
  
• The Port shipped out 323,433 TEUs in empty containers in July 2024, in contrast to 209,710 TEUs of empty containers for the same period of last year.
  

East and Gulf Coast Labor Situation

Paul Bingham, S&P Global Market Intelligence Economist, was Seroka’s guest and echoed comments made by Seroka that the impact of a possible East and Gulf Coast strike by the International Longshoremen’s Association (ILA) had been somewhat mitigated in 2024 by the shift of cargoes from East and Gulf Coast ports to West Coast ports: “Supply chain managers have been trying very hard this year to mitigate risk in advance by changing their operating practices. That's including shifting cargo to the West Coast instead of depending upon the East and the Gulf Coast ports and for all the other reasons that Gene has mentioned previously. Whether it's the effective closure of the Suez Canal route, the low water at the Panama Canal and some of the other labor risks such as … from the Canadian rail labor situation that may affect the ability of British Columbia ports, for example, to serve U.S. import markets.”
The result is: “The net result in terms of vulnerability for an East and Gulf Coast labor situation is to reduce some of the … risk of disruption that would follow an actual strike.”
Bingham added that there will be political pressure on the Biden administration to intervene in labor negotiations in an election year: “And there are the extreme pressures to have some support at the federal level, perhaps for example, the Secretary of Labor with some precedence of what they did on the West Coast … previously to try to reduce the duration of that strike … We believe in an election year the political pressures will be extreme on both sides to negotiate a settlement and we believe that, therefore, it's very unlikely that (we) would have a long duration strike that would seriously disrupt the economy this year.”

Does the Port of LA Have a Power Shortage?

A report in the Wall Street Journal alleged that the Port of Los Angeles has a power supply problem: “Container-handling companies say an unreliable power supply hinders a bid to phase out diesel-powered machinery by 2030.” The implication is that a power shortfall will adversely impact the transition to renewable energy goals set out by the Ports of Los Angeles and Long Beach in their Clean Air Action Plan that includes phasing out diesel powered cargo-handling equipment by 2030.

Seroka conceded that there was a problem but explained that there have been 12 outages in 2023 that mostly lasted for seconds and that had minimal impact on port operations. However, even slight outages can force terminal operations to recalibrate equipment: “Big picture, we've had about a dozen power interruptions here at the Port of Los Angeles over the last year. That's far too many. Most of these are short surges that last for seconds, but the impact is that if you see any kind of power disruption at a marine terminal, there are some types of equipment that have to be recycled. Think of your cell phone getting frozen and you've gotta turn it off and reboot it. Same thing, but in the industrial setting as opposed to minutes, it takes hours to recycle that shore side crane. And while it doesn't make up a big percentage of what we're doing here, any operational issue that our terminals face is important to me, and that's why we'll continue to work with the Los Angeles Department of Water and Power and others to make sure that we mitigate even the smallest of interruptions when it comes to electricity.”

Seroka said that the impact amounted to about four hours out of 1,100 hours worked by terminals at the Port per month: “Of the six marine operating facilities for container business here, seven terminals … run nine ships a week on average, that is about 54 ships a week. If we have one of those outages per month, we do run the risk of losing one shift of work because that equipment's recycling one shift out of 54 per month ... Another way to look at it is, we work more than 1,100 hours per month, and if we get hit with one of these disruptions from an electricity standpoint and we've got to recycle equipment at a facility or more, that takes two to four hours, let's call it four hours, to recycle equipment out of more than 1,100 hours of work per month.”