Gene Seroka on the Logistical Logjam at the Port of LA

Joe Weisenthal (0:11)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:17)

And I'm Tracy Alloway.

Joe Weisenthal (0:19)

Tracy, I think we're actually getting to the point where we've covered a lot of the supply chain by now.

Tracy Alloway (0:27)

No, that's impossible. There's always more.

Joe Weisenthal (0:30)

There's definitely always more, but I feel like the big things, we're starting to, if you were to have some manufactured good that was manufactured in China and consumed in the US., you wouldn't know a lot about it by now, if you had listened to all of our episodes.

Tracy Alloway (0:48)

We've certainly provided a public service in supply chain education, that's true.

Joe Weisenthal (0:54)

So yeah, okay. So we've talked about ships and the containers at least three times, I think, actually. Two on freight, one on dry bulk more.

Talked about trucking. We recently did a warehouse episode, although unfortunately you had to miss that one. But of course, okay, there's the ports. And we've talked about congestion at the ports, but we really haven't dived deep into what's going on there.

Tracy Alloway (1:22)

Yeah, well, we've sort of talked about the ports from the perspective of the shipping industry. And there's a bit of, I guess there's sort of blame being laid on both sides for the transportation gridlock, right? So a lot of the container shipping companies will say, well, yes, there's a shortage of containers and there are some issues in shipping, but the ports aren't handling stuff well, or they haven't made enough infrastructure investment. And so there's a lot of gridlock on that side.

And so you're sort of getting two different, well, two different versions of what's going on.

Joe Weisenthal (1:58)

Yeah, exactly right. Like we know that there's numerous ships that are waiting to be unloaded. We know some at the ports and people have pointed this out several times that there are several days or that there are ships that are waiting there for their turn to get out loaded. We know all kinds of things are going on. It is a source of bottleneck.

As far as I know, and we're gonna learn more about it shortly, it has yet to ease really. But I think it's time we really figured out like what is happening when the ship gets to the port, when it needs to get, have the containers unloaded, put on the trucks and so forth.

And really drill down into that specific points along the supply chain.

Tracy Alloway (2:36)

Yep, absolutely. So it's gonna be a really interesting discussion. My only knowledge about ports comes from that one season of The Wire. So I'm quite keen to learn more about how they work and what's going on right now.

Joe Weisenthal (2:49)

Exactly right. Well, we have the best possible guest for this episode. We're gonna be speaking to Gene Seroka. He is the executive director at the Port of Los Angeles. He's been in that role for a little bit over seven years.

Gene, thank you so much for joining us.

Gene Seroka (3:07)

Thanks, Joe and Tracy. Pleasure to be here today.

Joe Weisenthal (3:11)

Why don't you just start us off big picture? We know that there is a lot of congestion at the ports. How bad is it right now? What are the numbers like versus, say, versus historical comparisons?

And what are the prospects for things easing? Give us the state of the Port of Los Angeles right now.

Gene Seroka (3:31)

Yeah, Joe, the story really goes back over three years ago to the introduction of trade tariffs and a pretty unique take on the trade policy by the previous administration of Washington. Created a lot of choppiness in the industry. Folks were importing big numbers to get inside of tariff milestone dates and taxes that American companies were paying on those imported goods.

Similarly, and at the same time, we started to see retaliatory tariffs put in place, specifically by China, which have impacted our farmers, manufacturers, and our automotive sector broadly. Flash forward to the end of 2019, we went off a cliff. Because of those trade policies that were in place, our business dropped by about 16%, and most folks were looking for a pretty mundane year 2020 As we got into that area of around lunar new year in January of 2020, the bottom really fell out completely with the advent of the COVID-19 virus. The Chinese economy shut down, manufacturing sector was shuttered, and then soon thereafter, we went into safer at home orders, and our volume dropped another 19% up through May. Then suddenly the American consumer found that they could buy a lot more online, they could make a family outing to a big box retailer or a home improvement store, and our retail goods started going through the roof.