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Southern California ports see a renaissance in trade

On Behalf of | Jan 25, 2024 | Maritime Law |

California ports, people who work there and businesses that rely on them have been experiencing ups and downs in recent years. From the health crisis to labor disagreements to the latest issue with foreign policy obstacles, it can be difficult to predict shipping volume and everything that accompanies it.

However, importers are increasingly using these ports to conduct business. While this is undoubtedly a positive, companies still need to be cognizant of past challenges to be fully prepared when issues again arise as they inevitably do. During times of growth, it is even more essential to be ready for downturns and to know how to address legal issues.

Spike in Southern California port volume draws optimism

As challenges subside and fortunes improve, businesses should still look at what they overcame with the ports and prepare accordingly. The most recent numbers showed a marked year-to-year improvement from 2022 to 2023. From September through November, Southern California imports rose from 17% to 31%. This happened simultaneously to declines in other ports on the East Coast.

It is believed that the contract agreement with dockworkers played a major role. There had long been a contentious relationship between the port and its workers. Now that the labor difficulties are settled, business has gotten better. The financial benefit from using California ports has been a catalyst as well.

Since California is a shorter distance to Asia and the transportation options are extensive, businesses are seeing the benefit of shipping to Southern California instead of other locations. This comes after a steady decline going back several years. There is concern that this is a short-term phenomenon. Ports on the East Coast are known for having a population boom. The Southeast is better suited to efficiently reaching manufacturing hubs in countries like India.

California ports handle around 36% of the shipping market. This is down from two decades ago when it handled up to half the containerized imports. It had dropped to 33% in 2022. The East and Gulf Coasts are expected to face possible labor difficulties of their own, perhaps making it even easier for companies to use California ports.

Businesses that rely on ports should be ready for every eventuality

Whether it is business transactions, cost, international trade, transportation, labor difficulties or current events, business and shipping are undoubtedly connected. With the good news that California ports are again being used at greater levels, it is still wise to be ready for any issue that comes up. Having guidance with these possible challenges can avoid and address them effectively.