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Port of LA exec. director urges holiday shoppers to start early amid supply chain woes

Gene Seroka, Port of Los Angeles Executive Director, talks about the port's record cargo ship backup amid growing volumes and labor shortages.

Video Transcript

[MUSIC PLAYING]

AKIKO FUJITA: Well, port delays are leading to a massive supply crunch that is threatening to spill over into the holiday season. At the country's largest port, the port of Los Angeles, the times to process shipments are now extending out three weeks. Let's bring in the executive director of the port of LA, Gene Seroka joining us this morning. And Gene, I know there are so many layers to this story that lead to that three-week wait time we talked about. But what do you see as the biggest pain point right now?

GENE SEROKA: We're buying so much product, Akiko, combined with the work that we did in the summer for back to school and fall fashion, our importers here in the United States pulled inventory forward. They saw lead times being extended. And although Asia factory output is at recorded highs, they're still behind on orders there as well. So we started to see traditional peak season cargo moving our way in June, as opposed to normal times when we saw that in August and September.

ZACK GUZMAN: And Gene, the backlog there, I mean, looks pretty serious from reports we're seeing truck drivers having to wait a long time. And it seems like the backlog is more on kind of the offloading process, and they don't get paid for that. So, clearly not happy with that backlog. But when it comes to maybe federal assistance and what you're pushing for to help in that, what are you looking to get to fix the issue as it's grown?

GENE SEROKA: Good morning, Zack. Three pieces to that. Vessel productivity by our longshore members of the ILWU is up 80% in the last month compared to pre-surge times. And since this surge began last summer, we're up 50% in vessel productivity. With each ship that comes into the port of Los Angeles, we're loading and unloading more than 11,300 containers, which is the best in the world.

Truck turn times, although higher than I would like right now, are not that far off what we look like during peak seasons in the recent past. But here is the key statistic-- 30% of our truck appointments go unused every day for a variety of reasons. And that has to change. We've got skilled labor on deck. We're open, our truck drivers around the roads. We've got to take advantage of that open capacity.

AKIKO FUJITA: How do you do that?

GENE SEROKA: Well, we started a program with the help of port envoy John Porcari and others in the federal government, called Accelerate Cargo LA, where we've created a push system. We know how much cargo is on our docks by each of our importers telling them exactly where and when that cargo can be picked up, and getting commitments from those importers and their partner truckers. This basically will move cargo much quicker than just simply opening up the terminals and waiting for appointments to be made.

AKIKO FUJITA: Gene, I know there's also been talk of moving to a 24/7 operation. Is that really the solution to cut down some of the wait times, in addition to those trucking appointments you just talked about? And do you have the workers in place to transition in that direction?

GENE SEROKA: Our terminals are already working extended hours. By the time I left the harbor area Saturday night around 10:30, six of our seven terminals were actively working. And that's not a time in normal days that you would see that much activity. Realistically speaking, before we start adding more cost to the supply chain and pushing inflationary thoughts, we need to take advantage of that latent capacity I just mentioned.

The dock workers here of the ILWU have been averaging six days of work per week every week since the pandemic began in March of 2020. We've added about 1,000 longshore as an industry. The Employers Association continues to work with our skilled labor leadership at the ILWU to maximize every job opportunity.

But there are two other segments that we have to look at as well. On the truck driver side, there are 18,000 drivers registered to do business at the ports. Only half called here at least once a week. And on the warehousing side, which traditionally works a day shift only, we've got to match up hours of operation and get more folks on the job in that setting.

ZACK GUZMAN: Yeah, Gene, I wonder, too. I mean, we were hearing about this issue, you know, in the Senate Banking Committee yesterday. And during that testimony, people were talking about whether or not this is an issue of just kind of COVID supply backlogs and what we've seen in the pandemic, but also maybe a factor in a lack of investment going into infrastructure. Obviously, coming at an interesting time when we're waiting to see what progress is made in DC on that front. But you've been pretty outspoken about how other ports have seen money flow in, maybe not the case for the port of LA. Talk to me about how important that is to fix this from happening again, moving forward.

GENE SEROKA: That's right, and I've shared this with Department of Transportation Secretary Pete Buttigieg and other senior official and cabinet members in Washington. Over the last decade, the federal government and US Congress has out invested the West Coast ports at a rate of 11 to 1. That's $11 billion that's gone to port infrastructure on the East and Gulf Coast, compared to a little more than a billion dollars here on the West Coast.

And this conversation is so timely because we're hopeful that tomorrow, Congress takes up the vote on the infrastructure bill, as well as reconciliation. And we'll be working very closely with policymakers, legislators, and appropriators to get funding here because in our opinion, all roads lead to Los Angeles when it comes to return on investment, here at the nation's largest port.

AKIKO FUJITA: And finally, Gene, there's a lot of people watching this, saying, well, what does this all mean for me as a consumer? I know when we talked previously, you talked about potential delays going into the holiday season. What's going to be the impact down the line here for those who are thinking, am I going to be able to get the things I want during the holiday season?

GENE SEROKA: Yeah, the answer to that is yes. And because our import community saw this and the extended lead times, they began to bring holiday season inventory starting back in June, as I mentioned. So we will have Christmas on December 25th and other year-end holidays as scheduled. But maybe shop a little earlier. Go online, see if your favorite products are available. If not, set that timing up. But we'll be able to find plenty of gifts for family and friends. It may just take a little extra work and time to get prepared.