Mario Cordero, Executive Director of the Port of Long Beach, joins Yahoo Finance Live to discuss the impact of the pandemic on the Port of Long Beach and shipping bottlenecks.
Video transcript[MUSIC PLAYING]
AKIKO FUJITA: One of the largest ports in America is experiencing heavy traffic jams. 37 container ships remain anchored off the coasts of the Port of LA and the Port of Long Beach. This is the biggest backlog the Port of Long Beach has seen since the start of the pandemic. To find out more, let’s call on Mario Cordero. He is the Executive Director of the Port of Long Beach. Mario, it’s great talking to you. I have to say I was in port several months ago, I noticed the backlog that you could see in the waters. Tell me what contributes to it and to what extent you have been able to speed up the treatment.
MARIO CORDERO: Well, thank you, Akiko, and good afternoon. Thanks for the invitation. I think it essentially represents an ongoing disruption in the supply chain as you go back to the start of the pandemic. So there is always an unpredictable question regarding the constant delays and, of course, the whole question of anchors – ships anchored in the ports of the largest port complex in the country, which, by the way, I think all major ports container in the country have this problem. Otherwise, it is a global problem.
AKIKO FUJITA: You, of course, get a significant chunk of your traffic from China. A few weeks ago we saw these big delays at one of the biggest ports in China which came a few months after another shutdown due to an epidemic that occurred. How much do you see catching up on that adding to the backlog that you are already seeing right now?
MARIO CORDERO: So you are right Akiko. It is a major impact. And the port we’re referring to lately is Ningbo, a port in China that moves about 23 to 25 million containers, and the port — the port of origin in terms of the containers we get here on the west coast, in. especially Southern California. So obviously when they closed a terminal here recently over the past month and a half, they tested positive for COVID-19 in their workforce. And China is very proactive when that happens. They closed the terminal. And as you mentioned, when that happens, it causes a domino effect here on the west coast.
AKIKO FUJITA: So what are you doing at the Port of Long Beach right now to try to speed up the process? And finally, what does this mean for the ability of goods to end up in the hands of consumers? What type of backlog should we anticipate?
MARIO CORDERO: Well, the backlog will continue, unfortunately, and probably until the summer of 2022. I mean, the good news is we have a great economy here in the US, which is expected to exceed 7% GDP growth. from one year to the next. But when it comes to the Port of Long Beach, we’re trying to do whatever I can – whatever we can with the marine terminal operators to find ways and efficiencies, like, for example, we have designated 49 acres for a container area, and now we’re going to move that and expand it to 64 acres.
So those are ways in which we could allocate land to put in place some of the containers that need to be taken out of the terminal. Because there are capacity issues, of course, not just at the terminals, but along the supply chain to distribution warehouses inland.
AKIKO FUJITA: What goods are we talking about here? We have heard from so many companies who have talked about the delay in materials. We’ve heard about the chip shortage, which is, of course, not just something about shipping delays, but it’s a bigger issue. Where do you see – or which areas do you see the biggest problems?
MARIO CORDERO: Well, I think right now consumer demand, consumer goods, I think. We are in high season. Usually in normal times, August, September, October reflects back-to-school expenses. And of course, the holiday season is approaching. It would therefore be the high season of a given year in normal times. So add that to the impacts of the pandemic, and of course, it affects all types of consumer goods, be it appliances, outdoor furniture, etc. So I can represent pretty much all of the sectors that have been affected overall.
AKIKO FUJITA: And how much of that delay that you are seeing right now do you think is going to spill over into the holiday season?
MARIO CORDERO: Well, it’s going to go through the holiday season. So my advice for the holidays, get ready and start ordering your … your goods now. And don’t wait until the last minute to do your Christmas shopping, because this year in particular if you do that you might find yourself running out of gifts. Again, the tip is to start ordering your products in preparation for the holiday shopping.
AKIKO FUJITA: And finally, we’ve talked so much about the job market today, given the employment data we’ve released. A lot of companies talk about not being able to keep up with demand. They just don’t have the supply of workers. What does this dynamic look like at the Port of Long Beach, especially given the traffic jams you already face? Do you have enough workers to be able to handle all of this?
MARIO CORDERO: Yeah, for the Long Beach port team, the men and women who work on the docks, you know, the work there, they’ve been essential since the onset of this pandemic. So thanks to the actions of Governor Newsom and our mayor here, Robert Garcia, we were very proactive in distributing vaccines earlier this year. And therefore, again, this has certainly mitigated the impact of COVID-19 on the workforce. But suffice it to say that, again, these men and women are working day in and day out to try to move this cargo. So, you know, we will continue this commitment as long as the pandemic continues and the surge in imports that we have here continues.
AKIKO FUJITA: Mario Cordero, Executive Director of the Port of Long Beach, delighted to welcome you today. I appreciate the time.