Importers who shifted cargo away from West Coast ports due to fears of disruption from labor contract talks have begun bringing some of that volume back. However, retailers and suppliers have been reworking distribution strategies and sending goods to the East Coast and Gulf of Mexico to position goods closer to where consumers live. This has caused a 10% gap in market share losses at West Coast container ports.
Large and small retailers have been diverting cargo away from West Coast ports since before the contract covering 22,000 dockworkers at ports stretching from California to Washington State expired on July 1. During the first three months of 2023, West Coast ports handled 40% of U.S. container import volume, compared to 45% during the same period in 2019.
Colgate-Palmolive Co has already begun reversing some of the 25% of containers it routed away from West Coast ports. Meanwhile, some importers have started sending goods to the port at Ensenada, Mexico, to avoid 25% tariffs and take advantage of lower warehouse and labor costs.
The Port of Los Angeles said April volume was down from last year’s record levels but up for the second consecutive month. Importers remain optimistic that the labor negotiation process will eventually lead to a rebalancing of cargo volume.