Is the U.S. Ready for a Cargo Surge from Yemen? How are L.A. and Long Beach Ports Preparing?

 The harbors of Los Angeles and Long Beach, which make up the biggest cargo hub in the country, are getting ready for a boost in business due to issues in other parts of the world. The Suez Canal in Egypt has suddenly become a focal point in a potentially expanding conflict in the Middle East, and the Panama Canal is dealing with an extended period of drought.

These canals are crucial global trade routes. When problems arise in the interconnected global supply chain, it leads to expensive delays. Retailers and manufacturers then have to find alternative routes to transport their goods to consumers and factories.

In times of uncertainty, the Suez and Panama canals become viable alternatives for shippers who don't want to rely solely on Los Angeles and Long Beach. These ports faced a series of challenges related to the pandemic starting in March 2020, with backlogs and other issues. However, the situation has improved with the resolution of labor disputes at the Southern California docks. Longshore workers approved a new contract last year after several months of disruptions.

Port officials indicate that lost business has been recovered, and there is still plenty of capacity for more. Additionally, the days of COVID-19-related disruptions are behind us. The massive online shopping surge by U.S. consumers created congestion at the San Pedro Harbor, allowing ports on the East and Gulf coasts to take advantage and divert cargo away from Southern California.

The dynamics at these ports are significant because they are a crucial economic driver in Southern California. The impact extends beyond dockworkers to those in trucking, warehouse staffing, and various other roles within the expansive distribution and logistics network. Combined, the L.A. and Long Beach ports handle nearly 40% of U.S. imports from Asia, arriving in metal shipping containers on vessels almost as tall as the Empire State Building.

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