Port of Los Angeles (Calif)

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West Coast Dockworkers Ratify Contract

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The six-year agreement is expected to increase traffic at Pacific ports, which had sagged because of the prospect of a walkout.Dockworkers at ports along the West Coast have ratified a new contract, securing a sweeping agreement set to last six years and expected to ease tensions after cargo shipments were diverted to other regions.The contract between the International Longshore and Warehouse Union and the Pacific Maritime Association, which operates the terminals, covers 22,000 dockworkers at 29 ports from Los Angeles to Seattle.The contract was approved by 75 percent of members who voted, the union said late Thursday. Details of the agreement were not released publicly, and the union declined to comment. Unionized workers at the ports have average salaries in the low six figures.The maritime association did not respond to a request for comment.The two sides announced in June that they had reached a tentative agreement after a year of negotiations that prompted intervention from the Biden administration and coincided with a decline in the volume of cargo at several major ports along the West Coast.During the negotiation period, as workers staged a series of slowdowns, including at the twin ports of Los Angeles and Long Beach, some shipping companies diverted freight to ports along the Gulf and East Coasts and then never returned to their old routes.And the movement of goods continued to lag into the summer.At the Port of Los Angeles, the amount of cargo imported in July was down 25 percent from a year earlier. But at Port Houston, where some companies rerouted cargo, officials reported its best July on record in processing cargo.Geraldine Knatz, a former head of the Port of Los Angeles and now professor of the practice of policy and engineering at the University of Southern California, said she expected the contract’s ratification to give some shippers the level of comfort they needed to return to their old routes.“Everyone is expecting we will see an increase in volume,” she said of cargo handled on the West Coast.Matthew Shay, president of the National Retail Federation, said the West Coast ports played a critical role in the vitality of the business community nationwide.“Now that an agreement has been ratified by all parties, the millions of businesses and employees who rely on their operations can be assured that long-term stability will remain at the West Coast ports,” Mr. Shay said.Santul Nerkar More

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    West Coast Dockworkers Reach Contract Deal With Port Operators

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    After a year of prolonged negotiations that have led to delays and declines in cargo, the two sides agreed to a new contract with help from the Biden administration.After a year of contract negotiations that resulted in numerous delays and a decline in the movement of cargo at ports along the West Coast, union dockworkers and port operators have reached a tentative deal set to last for six years.In a joint statement released late Wednesday, the International Longshore and Warehouse Union and the Pacific Maritime Association announced a tentative agreement on a new contract that covers 22,000 workers at 29 ports from San Diego to Seattle, some of the busiest in the world.Details about the agreement, which is expected to be formally ratified by both sides, were not immediately released.President Biden, who stepped in last year to urge a swift resolution, released a statement congratulating both parties for reaching an agreement “after a long and sometimes acrimonious negotiation.”“As I have always said, collective bargaining works,” Mr. Biden said. “Above all I congratulate the port workers, who have served heroically through the pandemic and the countless challenges it brought and will finally get the pay, benefits, and quality of life they deserve.”Mr. Biden also thanked Julie Su, the acting U.S. labor secretary, for assistance in finalizing the deal.The outcome on Wednesday somewhat mirrored past negotiations between the two sides. In 2015, as negotiations went on for nine months, officials in the Obama administration intervened amid work slowdowns and increased congestion at ports.The protracted negotiations between the union and the Pacific Maritime Association, which represents the shipping terminals, have focused on disagreements over wages and the expanding role of automation.In recent weeks the Longshore and Warehouse Union, or the I.L.W.U., has staged a series of work slowdowns at the ports of Los Angeles and Long Beach, which in recent months have lost sizable business to ports along the Gulf and East Coasts. Cargo processing at the Port of Los Angeles, a key entry point for shipments from Asia, was down roughly 40 percent in February, compared with the year before.Recently, the U.S. Chamber of Commerce wrote a letter to Mr. Biden urging the administration to intervene immediately in the negotiations and appoint an independent mediator to help the two parties reach an agreement.Matthew Shay, president of the National Retail Federation, said the ongoing delays and disruptions have had a negative impact on retailers and other stakeholders who rely on the West Coast ports for business operations.“As we enter the all-important peak shipping season for holiday merchandise, retailers need a seamless flow of containers through the ports and to their distribution centers,” Mr. Shay said.On Wednesday, Gene Seroka, head of the Port of Los Angeles, said in a statement that the tentative agreement between the I.L.W.U. and the Pacific Maritime “brings the stability and confidence that customers have been seeking.”Matt Schrap, chief executive of the Harbor Trucking Association, a trade group for transportation companies serving West Coast ports, said his organization is eager for cargo traffic to return to normal soon.“We need the certainty,” he said. “This has been a long, hard process.” More

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    Biden Casts Inflation as a Global Problem During a Visit to the Port of Los Angeles

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    The visit to the nation’s busiest entry point for goods comes as President Biden struggles to show progress on resolving supply chain issues that are fueling inflation.LOS ANGELES — President Biden on Friday defended his administration’s efforts to deal with inflation, just hours after a new report showed a surprise spike in prices that puts new pressure on the White House to ease the burden on consumers.Mr. Biden used the Port of Los Angeles as a backdrop to highlight his fight against inflation, delivering a speech about how his team has tried to speed up the delivery of goods disrupted by the coronavirus pandemic.“The job market is the strongest it’s been since World War II, notwithstanding inflation,” Mr. Biden said, standing on the battleship Iowa, a decommissioned warship that has been turned into a museum.With shipping containers piled up behind him, Mr. Biden emphasized that his administration had taken action last year to reduce congestion at ports, allowing 97 percent of all packages to be delivered on time during the holiday shopping season.But six months later, serious problems remain and persistent inflation has become a major political liability for Mr. Biden.The war in Ukraine has disrupted flows of food, fuel and minerals, adding to pandemic-related shortages and pushing inflation to multidecade highs. Data released on Friday morning showed inflation picking up again, rising 1 percent from the previous month. Compared with one year ago, consumer prices rose 8.6 percent, the largest annual increase since 1981.While some clogs in the supply chain look to be clearing, analysts say that trend may yet stall — or even reverse — in the months to come, as retailers enter a busier fall season and dockworkers on the West Coast renegotiate a labor contract that could lead to work slowdowns or a strike.Understand Inflation and How It Impacts YouInflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Greedflation: Some experts contend that big corporations are supercharging inflation by jacking up prices. We take a closer look at the issue. Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.For Investors: At last, interest rates for money market funds have started to rise. But inflation means that in real terms, you’re still losing money.Mr. Biden said he understands that Americans are anxious.“They are anxious for good reason,” he said. But he stressed that inflation is largely the result of increases in the price of gasoline and food, and he blamed the price hikes in those goods on Russia’s invasion of Ukraine.Mr. Biden argued that large price increases in the United States were part of a global problem with inflation and that Americans were in better shape than their counterparts elsewhere because of a strong jobs market and a declining budget deficit.He also lashed out at nine shipping companies that he said had used the global economic situation to increase prices by 1,000 percent, artificially adding to the cost of goods around the world. He did not name the companies.But he said they “have raised their prices by as much as 1,000 percent.”He called on Congress to crack down on shipping companies that raise prices.“The rip-off is over,” he said.Mr. Biden is correct that soaring inflation is a global problem. In a note to clients on Friday, Deutsche Bank Research said the United States ranked 48th for its inflation rate on a list of 111 countries, just above the middle of the pack.But that is little comfort to U.S. households struggling with rising costs.Analysts say the U.S. logistics industry is heading into its busier fall season, when retailers bring in products for back-to-school shopping and the holidays. Chinese exports are also on the rise as an extended coronavirus lockdown lifts in Shanghai.And, most crucially, dockworkers on the West Coast are renegotiating a labor contract with port terminal operators that expires at the end of this month. If they fail to reach an agreement, West Coast ports may see slowdowns or shutdowns that would delay deliveries and add to supply chain gridlock.Over the past two decades, labor negotiations led to at least three such slowdowns or stoppages that resulted in delays. In recent weeks, some companies that typically ship into the West Coast have begun routing some goods to the East or Gulf Coasts to try to avoid any logjams.Gene Seroka, the executive director of the Port of Los Angeles, said he expected labor talks to go beyond the July 1 contract expiry date, but downplayed the risks to trade.“It’s important to know, with all this cargo on the way, the rank-and-file dockworkers will be out on the job every day,” he said.“And the employers know they’ve got to get these products to market,” he added. “So we’re going to give these people some room. Let them negotiate in their space, and the rest of us are going to work on keeping the cargo and the economy moving.”Dockworkers on the West Coast, including at the Port of Los Angeles, are renegotiating a labor contract with port terminal operators that expires at the end of this month. Failure to reach an agreement could further delay deliveries.Stella Kalinina for The New York TimesMr. Biden has kept close relationships with labor unions and may hesitate to put pressure on dockworkers to conclude any talks. But a work slowdown or strike would be bad news for the administration, which has frequently come under attack about rising prices.By some metrics, supply chain pressures have been easing in recent weeks. The average global price to ship a 40-foot container of goods fell to $7,370 as of June 3, down from a peak of more than $11,000 in September, though that was still five times higher than before the pandemic began, according to the Freightos Baltic Index.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Crunch at Ports May Mean Crisis for Family Farms

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    It’s just 60 miles from El Dorado Dairy in Ontario, Calif., to the nation’s largest container port in Los Angeles. But the farm is having little luck getting its products onto a ship headed for the foreign markets that are crucial to its business.The farm is part of one of the nation’s largest cooperatives, California Dairies Inc., which manufactures milk powder for factories in Southeast Asia and Mexico that use it to make candy, baby formula and other foods. The company typically ships 50 million pounds of its milk powder and butter out of ports each month. But roughly 60 percent of the company’s bookings on outbound vessels have been canceled or deferred in recent months, resulting in about $45 million in missed revenue per month.“This is not just a problem, it’s not just an inconvenience, it’s catastrophic,” said Brad Anderson, the chief executive of California Dairies.A supply chain crisis for imports has grabbed national headlines and attracted the attention of the Biden administration, as shoppers fret about securing gifts in time for the holidays and as strong consumer demand for couches, electronics, toys and clothing pushes inflation to its highest level in three decades.Yet another crisis is also unfolding for American farm exports.The same congestion at U.S. ports and shortage of truck drivers that has brought the flow of some goods to a halt has also left farmers struggling to get their cargo abroad and fulfill contracts before food supplies go bad. Ships now take weeks, rather than days, to unload at the ports, and backed-up shippers are so desperate to return to Asia to pick up more goods that they often leave the United States with empty containers rather than wait for American farmers to fill them up.The National Milk Producers Federation estimates that shipping disruptions have cost the U.S. dairy industry nearly $1 billion in the first half of the year in terms of higher shipping and inventory costs, lost export volume and price deterioration.“Exports are a huge issue for the U.S. right now,” said Jason Parker, the head of global trucking and intermodal at Flexport, a logistics company. “Getting exports out of the country is actually harder than getting imports into the country.”Agriculture accounts for about one-tenth of America’s goods exports, and roughly 20 percent of what U.S. farmers and ranchers produce is sent abroad. The industry depends on an intricate choreography of refrigerated trucks, railcars, cargo ships and warehouses that move fresh products around the globe, often seamlessly and unnoticed.U.S. farm exports have risen strongly this year, as the industry bounces back from the pandemic and benefits from a trade deal with China that required purchases of American agricultural products. Strong global demand for food and soaring commodities prices have lifted the value of U.S. agricultural exports more than 20 percent over last year.Still, exporters say they are leaving significant amounts of money on the table as a result of supply chain problems. And many farmers are now struggling to keep up with soaring costs for materials like fertilizer, air filters, pallets and packaging, as well as find farmhands and drivers to move their goods.A survey by the Agriculture Transportation Coalition, which represents exporters, found that 22 percent of foreign agriculture sales on average were being lost as a result of transportation challenges.Delays at ports have particularly hurt products that move in corrugated metal containers, like cheese, butter, meat, walnuts and cotton.One company, Talmera USA Inc., which exports milk powder, cheese and dairy ingredients like lactose, had a shipment delayed so many times that its load finally wound up on the original vessel it was assigned to after the ship had left the port in Seattle, circumnavigated Asia and returned weeks later.Mr. Anderson said that his company’s customers were beginning to look to suppliers in Europe, New Zealand and other countries for their purchases, even though the U.S. dairy industry has a reputation for high quality. “Frankly none of that matters to the customer if we can’t get it there,” he said.Part of the problem is that shipping companies are able to charge far more to ferry goods from Asia to the United States than vice versa, so they don’t want to waste time waiting for a less lucrative load departing from the West Coast.According to data from Freightos, an online freight marketplace, the cost to ship a 40-foot container from Asia to the U.S. West Coast soared to $18,730 in November — more than 17 times what it cost to make the reverse trip.As a result, more than 80 percent of the 434,000 20-foot containers exported out of the Port of Los Angeles in September were empty — up from about two-thirds in September 2020 and September 2019.Mario Cordero, the executive director of the Port of Long Beach, said that the price differential encouraged shipping companies to get their containers “back to Asia A.S.A.P. so you can load it with import items.”“And unfortunately the American exporter is impacted by this approach,” he said.El Dorado is part of one of the nation’s largest cooperatives, California Dairies, which manufactures milk powder for factories in Southeast Asia and Mexico.Adam Perez for The New York TimesThe company ships more than a thousand 20-foot containers of dairy products out of the country each month.Adam Perez for The New York TimesIn recent months, up to 60 percent of the company’s bookings on outbound vessels have been canceled.Adam Perez for The New York TimesA supply crunch in the trucking industry is also affecting farmers, as truckers find better pay and hours delivering holiday gifts than hauling soybeans and swine.Tony Clayton, the president of Clayton Agri-Marketing Inc., in Jefferson City, Mo, exports live animals around the world for breeding. He said the company is competing at both ports and airports for space for dairy heifers, swine and goats. And many livestock truckers have found that they can earn more hauling dry freight.“It is a challenge,” Mr. Clayton said. “We’re all fighting and competing for those people who will sit behind the steering wheel.”The infrastructure bill that Congress passed on Nov. 5 aims to remedy supply chain backlogs by investing $17 billion in American ports, many of which rank among the least efficient in the world.The bill also includes funding to improve railways, roads and waterways, as well as a provision to fund pop-up container yards outside the Port of Savannah, in Georgia, to ease congestion. It will also lower the minimum age of truckers who can cross state lines to 18, in a bid to attract more workers to a profession that has become a key bottleneck in supply chains.In September, the U.S. Department of Agriculture also announced it would dispense $500 million to help farmers deal with transportation challenges and rising materials costs.John D. Porcari, the Biden administration’s port envoy, said farm exports are a “primary focus” for the administration, and that the White House was trying to encourage private sector companies, including ocean carriers, to get the supply chain moving.The White House held a round table with agricultural exporters on Friday, and Mr. Porcari plans to visit the Port of Oakland, in California, one of the biggest export points for agriculture, this week.“We know that some sectors have had more trouble than others, and we’re working to eliminate those bottlenecks,” Mr. Porcari said in an interview. While agricultural exporters have welcomed long-term infrastructure investments, they remain concerned about more immediate losses. Mr. Anderson — whose company is responsible for nearly 10 percent of America’s milk supply and a fifth of American butter production — said he had been frustrated that much of the public dialogue from the government and in the media had focused more on consumer imports.“Are we going to get toys for Christmas? Are we going to get chips for automobiles? We think those are real concerns and they need to be talked about,” he said. “What’s not being talked about is the long-term damage being done to exporters in the world market and how that’s going to be devastating to our family farms.”El Dorado is a third-generation dairy. Delayed and canceled shipments are having a devastating impact on farmers’ finances.Adam Perez for The New York TimesIncreased costs for gasoline, trucking and warehouse storage are also contributing to food price inflation.Adam Perez for The New York TimesIt has been difficult for farmers, who must negotiate contracts in advance, to pass on higher costs for fuel, fertilizer, pallets and other products.Adam Perez for The New York TimesAgricultural exporters have had to get creative to bypass congested ports and warehouses. Mr. Anderson said his company was considering rerouting some shipments more than a thousand miles to the port in Vancouver.Mike Durkin, the chief executive of Leprino Foods Company, the world’s largest maker of mozzarella cheese, told House lawmakers this month that nearly all of the company’s 2021 ocean shipments had been canceled and rebooked for a later date. More than 100 of the company’s bookings this year had been canceled and rebooked 17 times, Mr. Durkin said, equating to a five-month delay in delivering their cheese.In the interim, Leprino Foods has had to pay to hold its cheese in refrigerated containers in carrier yards, racking up an additional $25 million in fees this year. More

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    Biden to Announce Expansion of Port of Los Angeles's Hours

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    The expansion of the Port of Los Angeles’s hours comes as the administration has struggled to untangle kinks in global supply chains and curb the resulting inflation.WASHINGTON — President Biden will announce on Wednesday that the Port of Los Angeles will begin operating around the clock as his administration struggles to relieve growing backlogs in the global supply chains that deliver critical goods to the United States.Product shortages have frustrated American consumers and businesses and contributed to rising prices that are hurting the president politically. And the problems appear poised to worsen, enduring into late next year or beyond and disrupting shipments of necessities like medications, as well as holiday purchases.Mr. Biden is set to give a speech on Wednesday addressing the problems in ports, factories and shipping lanes that have helped produce shortages, long delivery times and rapid price increases for food, televisions, automobiles and much more. The resulting inflation has chilled consumer confidence and weighed on Mr. Biden’s approval ratings. The Labor Department is set to release a new reading of monthly inflation on Wednesday morning.Administration officials say that they have brokered a deal to move the Port of Los Angeles toward 24/7 operations, joining Long Beach, which is already operating around the clock, and that they are encouraging states to accelerate the licensing of more truck drivers. UPS, Walmart and FedEx will also announce they are moving to work more off-peak hours.Mr. Biden’s team, including a supply chain task force he established earlier this year, is working to make tangible progress toward unblocking the flow of goods and helping the retail industry return to a prepandemic normal. On Wednesday, the White House will host leaders from the Port of Los Angeles, the Port of Long Beach, and the International Longshore and Warehouse Union to discuss the difficulties at ports, as well as hold a round table with executives from Walmart, UPS and Home Depot.But it is unclear how much the White House’s efforts can realistically help. The blockages stretch up and down supply chains, from foreign harbors to American rail yards and warehouses. Companies are exacerbating the situation by rushing to obtain products and bidding up their own prices. Analysts say some of these issues may last into late next year or even 2023.Administration officials acknowledged on Tuesday in a call with reporters that the $1.9 trillion economic aid package Mr. Biden signed into law in March had contributed to supply chain issues by boosting demand for goods, but said the law was the reason the U.S. recovery has outpaced those of other nations this year.Consumer demand for exercise bikes, laptops, toys, patio furniture and other goods is booming, fueled by big savings amassed over the course of the pandemic.Imports for the fourth quarter are on pace to be 4.7 percent higher than in the same period last year, which was also a record-breaking holiday season, according to Panjiva, the supply chain research unit of S&P Global Market Intelligence.Meanwhile, the pandemic has shut down factories and slowed production around the world. Port closures, shortages of shipping containers and truck drivers, and pileups in rail and ship yards have led to long transit times and unpredictable deliveries for a wide range of products — problems that have only worsened as the holiday season approaches.Home Depot, Costco and Walmart have taken to chartering their own ships to move products across the Pacific Ocean. On Tuesday, 27 container ships were anchored in the Port of Los Angeles waiting to unload their containers, and the average anchorage time had stretched to more than 11 days.Jennifer McKeown, the head of the Global Economics Service at Capital Economics, said that worsening supplier delivery times and conditions at ports suggested that product shortages would persist into mid- to late next year.“Unfortunately, it does look like things are likely to get worse before they get better,” she said.Ms. McKeown said governments around the world could help to smooth some shortages and dampen some price increases, for example by encouraging workers to move into industries with labor shortages, like trucking.President Biden is set to give a speech on Wednesday addressing the problems in ports, factories and shipping lanes that have helped create shortages.Stefani Reynolds for The New York Times“But to some extent, they need to let markets do their work,” she said.Phil Levy, the chief economist at the logistics firm Flexport and a former official in the George W. Bush administration, said a Transportation Department official gathering information on what the administration could do to address the supply chain shortages had contacted his company. Flexport offered the administration suggestions on changing certain regulations and procedures to ease the blockages, but warned that the problem was a series of choke points “stacked one on top of the other.”“Are there things that can be done at the margin? Yes, and the administration has at least been asking about this,” Mr. Levy said. However, he cautioned, “from the whole big picture, the supply capacity is really hard to change in a noteworthy way.”The shortages have come as a shock for many American shoppers, who are used to buying a wide range of global goods with a single click, and seeing that same product on their doorstep within hours or days.The political risk for the administration is that shortfalls, mostly a nuisance so far, turn into something more existential. Diapers are already in short supply. As aluminum shortages develop, packaging pharmaceuticals could become a problem, said Robert B. Handfield, a professor of supply chain management at North Carolina State University.And even if critical shortages can be averted, slow deliveries could make for slim pickings this Christmas and Hanukkah.“I think Johnny is going to get a back-order slip in his stocking this year,” Dr. Handfield said. Discontent is only fueled by the higher prices the shortages are causing. Consumer price inflation probably climbed by 5.3 percent in the year through September, data from the Bureau of Labor Statistics is expected to show on Wednesday. Before the pandemic, that inflation gauge had been oscillating around 2 percent.Officials at the White House and the Federal Reserve, which has primary responsibility for price stability, have repeatedly said that they expect the rapid price increases to fade. They often point out that much of the surge has been spurred by a jump in car prices, caused by a lack of computer chips that delayed vehicle production.But with supply chains in disarray, it is possible that some new one-off could materialize. Companies that had been trying to avoid passing on higher costs to customers may find that they need to as higher costs become longer lived.Others have been raising prices already. Tesla, for instance, had been hoping to reduce the cost of its electric vehicles and has struggled to do that amid the bottlenecks.“We are seeing significant cost pressure in our supply chain,” Elon Musk, the company’s chief executive, said during an annual shareholder meeting Oct. 7. “So we’ve had to increase vehicle prices, at least temporarily, but we do hope to actually reduce the prices over time and make them more affordable.”For policymakers at the White House and the Fed, the concern is that today’s climbing prices could prompt consumers to expect rapid inflation to last. If people believe that their lifestyles will cost more, they may demand higher wages — and as employers lift pay, they may charge more to cover the cost.What happens next could hinge on when — and how — supply chain disruptions are resolved. If demand slumps as households spend away government stimulus checks and other savings they stockpiled during the pandemic downturn, that could leave purveyors of couches and lawn furniture with fewer production backlogs and less pricing power down the road.If buying stays strong, and shipping remains problematic, inflation could become more entrenched.Some of the factors leading to supply chain disruptions are temporary, including shutdowns in Asian factories and severe weather that has led to energy shortages. Consumer habits, including spending on travel and entertainment, are expected to slowly return to normal as the pandemic subsides.But most companies have enormous backlogs of orders to work through. And company inventories, which provide a kind of insulation from future shocks to the supply chain, are extremely low.To get their own orders fulfilled, companies have placed bigger orders and offered to pay higher prices. The prospect of inflation has further encouraged companies to lock in large purchases of products or machinery in advance.“The customers that are willing to pay the most are most likely to get those orders filled,” said Eric Oak, an analyst at Panjiva. “It’s a vicious cycle.”Emily Cochrane More