According to the latest numbers, the value of California’s merchandise export trade has declined 10% from one year ago. By comparison, overall U.S. merchandise exports fell 6.2% over the same period.
California currently accounts for 8.8% of U.S. merchandise exports, down from a 9.2% share a year ago. “In a more positive vein, California’s share of the nation’s merchandise export trade has improved in the past two months after bottoming out in February at an all-time low of 8.5%,” said Jock O’Connell, Beacon Economics’ International Trade Adviser.
Of more immediate concern to exporters is the intensifying labor dispute between the International Longshore and Warehouse Union and terminal operators at West Coast seaports. Within the last few days, ILWU members have engaged in actions (usually in the form of withholding labor) that have disrupted the flow of containerized trade.
Nearly a year has passed since the July 1, 2022, expiration of the union’s last contract with the Pacific Maritime Association, the bargaining agent representing shipping lines and terminal operators. Past failures to reach an agreement have led to serious disruptions in the operations of West Coast seaports. No one should discount the long-term implications of the failure of the two sides to reach common ground.
For many years now, West Coast ports have seen their share of America’s transpacific container trade drop from as high as 70%. This shift has occurred largely because of massive financial investments that have been made to upgrade ports along the Atlantic and Gulf Coasts, allowing them to handle larger vessels and more containers. But another, far-from-insignificant, reason for the increased diversion to ports east of Panama is the tarnished reputation West Coast ports have long suffered due to periodic breakdowns in labor relations.
