US West Coast Ports Gained Market Share After Labor Deal

U.S. West Coast ports, which reached a labor deal with their workers this summer, gained market share in August from the previous month, while their main rivals on the East Coast lost ground, Descartes Systems Group DSG.TO said on Monday.

For more than a year, as worker labor talks dragged on, West Coast ports lost market share. Worried shippers diverted containers filled with everything from furniture to food to ports on the East Coast and Gulf of Mexico.

Some shippers told Reuters they started sending cargo back to West Coast ports before employers and the longshore union reached a tentative contract agreement covering 22,000 dockworkers on June 15 and employees ratified the deal on Aug. 31.

August market share for the biggest West Coast ports rose 3.6% from July to 41.9%, while the top ports on the East and Gulf Coasts fell 3.3% to 43.1%.

While it is too early to tell if the West Coast labor deal swayed the August results, "we can expect some of the 1 million TEUs that left to come back now that the uncertainty is gone," Chris Jones, an executive vice president at Descartes, said referring to 20-foot equivalent units, a measurement standard for ocean cargo.

The Port of Los Angeles, historically the nation's busiest, handled 47,095 more TEU in August than July, an increase of 12.9%. The adjacent Port of Long Beach gained 12.1%, after adding 35,996 TEU.

Across the country, the busiest East Coast port at New York/New Jersey processed 24,089 fewer TEU versus July, a 6.3% decline. Savannah, Georgia's port had the biggest drop at 11.4%, or 26,020 fewer TEU.

"The continuing drought situation in Panama may hasten that return" of cargo to the West Coast, Descartes said in its report. Low water levels in the Panama Canal have slowed ship passages, which could prompt some companies to reroute cargo destined for the East Coast and Gulf Coast to the West Coast.

(Reuters - Reporting by Lisa Baertlein; Editing by David Gregorio)