Issue link: https://pma.uberflip.com/i/1533421
14 2024 ANNUAL REPORT An Inflection Point for West Coast Ports? In the first full year governed by the PMA-ILWU coastwise contract, global trade grew. Battle-tested West Coast ports efficiently handled the higher volumes and fed the national supply chain. A late-2024 surge in container volumes at the Ports of Los Angeles and Long Beach generated the second-busiest year ever for the country's largest maritime trade gateway. The question is whether West Coast ports can sustain this growth and build on the uptick in market share to recover even more ground lost to East Coast and Gulf Coast ports since 2002. Even as terminal operators and port authorities in the West invest in infrastructure and innovation, new manifestations to familiar issues are creating significant uncertainty: Will tariffs and production shifts away from China hurt West Coast trade; will environmental regulations being contemplated in Southern California restrict cargo volumes; and will the coastwise contract be fully honored, including the automation agreement that dates back to 2008? Growing Volumes While Reducing Emissions Compared with competitors to the east, West Coast ports face greater tension between cargo growth and the mandate to go green. In 2024, the region advanced on both fronts as new zero-emission equipment came online, and multi-billion-dollar port upgrades got underway. But proposed rulemaking by governmental agencies in the West, most notably the South Coast Air Quality Management District, could impact terminal operations. PMA, joined by industry and ILWU leaders, is working to voice concerns about the adoption of any new regulations that would impede the ports' ability to continue to operate and grow. As new regulations are contemplated, particularly in Southern California, the need is clear for realistic timelines and incentives to develop the necessary infrastructure to support a zero-emission future. Reversing – or at Least Halting – Market-Share Losses However the policy issues are resolved, the largest West Coast port complex will continue to operate under the country's most stringent emission regulations as it pursues the strategic goal of regaining market share from other American ports. Over the past two decades, the San Pedro Bay ports have seen their market share of imported containerized cargo from Asia fall from 55% to less than 40%. The losses can be traced back to the West Coast port shutdown during the 2002 labor negotiations with the ILWU. With terminals idled and ships lining up at sea, port authorities up and down the Atlantic Seaboard and along the Gulf of Mexico saw an opportunity and invested in expansion and modernization to provide shippers with a competitive alternative. At the very least, maintaining current market-share levels at the San Pedro Bay ports is vital to the region's long-term economic growth, according to a new 2024 report by maritime economist John Martin, PhD, commissioned by PMA. At issue is discretionary cargo, those imports destined for markets east of California, which accounted for Market Share of Asian Imported Cargo Tonnage by Port Range A new era for PMA led by President and CEO Stephen Hennessey set sail in 2024 on a rising tide. After five years of unprecedented challenges, West Coast ports faced neither labor uncertainty nor whiplash from supply shocks, resulting in an uptick to near-record cargo volumes coastwide. Source: Martin Associates