Port of L.A. Leader Gene Seroka Talks Shipping

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Tom Keene** (0:07)
And of course, across the Pacific, from San Diego up to Vancouver, there's just so much that we don't cover being here on the far and distant shore. Gene Seroka owns the high ground here, driving all of the Los Angeles port technology. He's been doing it for 12, 14 years. We're thrilled, we love when he comes in because he just gives us a flavor. Thumb up or thumb down right now, on Pacific transport, given a war.

**Gene Seroka** (0:33)
Thumbs up. We've seen a lot of fits and starts because of trade policy, the war and the run. There are five conflicts happening in the Middle East right now. The Suez Canal effectively has been running at 10 to 20% efficiency for four years. So cargo has really started to move in to that Southern California gateway over this time, because it didn't have that many options. But you know, Tom, compared to COVID-19, when we saw all those ships backed up and the piles of cargo, things are moving normal. We've moved more cargo during this time period than we did during the peak of the peak then, and not one ship has been backed up.

**Tom Keene** (1:09)
Are your union members happy? Are they working triple overtime kind of boom economy?

**Gene Seroka** (1:13)
I see some of these guys at the Elks Club for happy hour. They're getting a lot of hours on the job. They're working, they're throwing the cargo, they're hustling. Yeah, they're the best in the business.

**Tom Keene** (1:22)
We're like, yeah, it's like overtime.

**Damian Sassower** (1:24)
Well, I love the genes making comparisons to what the market was like at the height of the pandemic and how improved, how much more efficient it's running. I mean, talk to us a little bit about those lessons you learned from the pandemic. Are they paying off?

**Gene Seroka** (1:35)
Yeah, Damian, two things. Number one, we had to be humble, lean on each other, kind of open up the books a little bit and see where it went wrong. And it was probably a little bit of communication, lapse, folks doing things on their own, nobody trying to do anything sinister. But everybody was out there just trying to edge ahead for themselves. Second, the advent of technology, whether it's the truck reservation system, being able to see cargo 40 days before it lands on the shore of Los Angeles, all of that makes us smarter, leaning on each other made us better.

**Damian Sassower** (2:06)
You know, Tom, this is amazing because if you look at JP Morgan, a lot of these people and what they're talking about, what they got wrong here about the impact of inflation of hormones of Iran on inflation here in the US is that the demand destruction is real, like the way that the consumer has adjusted their demand patterns in order to adjust to the supply shock. Talk to us about what else you're seeing from the perspective of the consumer. Are you seeing volumes still continuing to expand? Are they kind of getting a little constrained here? What are your thoughts?

**Gene Seroka** (2:33)
Yeah, Damian, the example is happening right now. We saw small to middle sized importers bringing in their cargo a little bit earlier than a traditional peak season. Two main reasons. One, the temporary tariffs were expiring on July 24th. I know my price, I've got a window, I've got to speed the cargo to market. And then second, the fuel adjustment factors in the shipping industry lag by about three months. So they saw a day when that price was going to spike. Let me average my cost down, get as much product in as I can.

**Tom Keene** (3:03)
I look at this, Gene, and wrapped around it is, I think it's 88 different cities in Los Angeles. In Los Angeles, it's like bigger than Rhode Island.

**Gene Seroka** (3:12)
That's right, 88 cities in LA. County.

**Tom Keene** (3:15)
What's the state, you're such a great voice for an LA., downtrodden, billionaire's tax, everybody's moving to Austin, Texas, or they're moving up to the Central Valley, et cetera, et cetera. What's the real story of LA right now that you see?

**Gene Seroka** (3:30)
One in 15 working Angelenos have a job related to this port complex and supply chain. That's super powerful. We've got 20 million people that live in Southern California. So when we do all these imports, we got a lot of mouths to feed. We've got a lot of consumers. We also have the largest manufacturing base of employment in the country. 400,000 jobs in LA. County that work for manufacturers.