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As U.S. import demand fades and inbound cargo increasingly shifts away from Southern California ports, the highly publicized containership backup at the neighboring ports of Los Angeles and Long Beach is finally showing signs of returning to some form of normal.
The Marine Exchange of Southern California on Friday reported that the backup hit a nearly 2-year low last Thursday, with just six containerships in the queue, before gaining two on Friday—bringing the number to eight. The six ships is the shortest the backup has been since October 22, 2020, when the pandemic-fueled import surge was just starting to take shape.
It’s been a wild ride these last two years. Before the backup started in Summer 2020, the “normal” number of containership awaiting at anchor was just zero or maybe one vessel. But as consumer settled in to their new normal and pandemic-fueled spending ramped up, within a couple months the backup grew to more 60 ships, in January 2021, before tapering back some in the first few months of last year. But with the arrival of summer shipping season in June 2021, the backup once again exploded in size through the end of the year before peaking at the January 2022 all-time of record of 109 ships.
In November of 2021, the backup had gotten so bad that officials initiated a new queuing process requireing ships to wait out at sea rather at local anchorages—part an effort to improve safety and air quality near the coast.
While it was inevitable that the backup would improve slightly during the first few months of this year with the passing of peak holiday season, the question remained whether or not the number of ships in line would continue to fall or build back up again.
The last time we checked in with the Southern California backup back in June, officials were reporting 16 containerships, making for a 2022 low at the time. As peak summer shipping season beckoned, ports were preparing for a surge of imports as China opened back up from COVID-19 lockdowns—providing uncertainty related to the backup moving forward. For the most part, this year’s peak shipping season got off to a muted start amid worsening inflation data, rising interest rates, and retailers already sitting on extra inventory.
Although U.S. imports started the year off with a bang, it’s clearer now that the pandemic-fueled import bonanza seems to have pretty much faded and imports are just now starting to fall below last year’s historic levels—a trend that is forecast to continue through the end of the year.
On top of all this, widely-reported congestion on the West Coast and the threat of labor negotiations between West Coast dockworkers and employers breaking down have led some shippers to divert cargo from usual Southern California gateways to East and Gulf Coast ports, which continue to report strong monthly cargo numbers (and their own worsening backups) as they pick up imports that would typically go through Los Angeles or Long Beach.
This is all to say the Southern California containership backup is continuing to improve for a variety of reasons (this is great news!), but whether or not it can be eliminated to the point of no return (at least in the short-term) is still to be determined.
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