Odd Lots - Episode: "Lots More on What America's Busiest Port is Seeing from the Trade Tariffs"

Release Date: June 6, 2025

In this episode of Bloomberg's Odd Lots, hosts Joe Weisenthal and Tracy Alloway delve deep into the ramifications of recent trade tariffs on the United States' busiest port—the Port of Los Angeles. Titled "Lots More on What America's Busiest Port is Seeing from the Trade Tariffs," the episode provides an illuminating analysis of how shifting trade policies are impacting import volumes, small and medium-sized businesses, and ultimately, American consumers.

Current State of the Port of Los Angeles

The episode kicks off with a candid conversation between Joe and Tracy, setting a lighthearted tone before transitioning into the core discussion. They introduce their guest, Gene Sirocca, the Executive Director of the Port of Los Angeles, who provides an expert perspective on the current state of the port amidst fluctuating trade policies.

Gene Sirocca shares alarming statistics: “Over the last seven days here at the largest port in the Western Hemisphere, we've averaged five container ships a day. Normally at this time of year, it would be about 10 to 12 ships in port every single day” (03:19). This significant reduction in ship arrivals underscores the immediate impact of trade tariffs on import operations.

Impact of Tariffs on Import Volumes

The discussion pivots to the effect of tariffs on import behaviors. Gene explains that the average tariff rate, initially spiking to 145%, was later reduced to 30% after meetings in Geneva. However, this reduction did not reinvigorate the import community as expected. “A lot of American importers simply slammed on the brakes when they saw the 145%. … But what I'm not saying are a lot of new orders because 90 days is a short period of time in our business” (04:10).

Joe highlights the precarious position of retailers who operate on long cycle orders. He remarks, “if you're a big retailer, maybe you can like take the risk… But for smaller ones… that's probably not enough certainty” (05:00). Gene confirms that the majority of importing companies at the Port of Los Angeles are small to medium-sized businesses, lacking the capital to absorb high tariffs or invest in inventory buffering.

Challenges for Small and Medium-Sized Businesses

Gene elaborates on the struggles faced by smaller importers: “They didn't have the wherewithal in some cases to be able to front load, inventory, push carrying costs out or get extra warehousing” (05:45). This financial strain forces these businesses to make tough choices, often opting to either accept high costs or risk becoming uncompetitive against larger counterparts.

The conversation underscores the uneven playing field created by tariffs, where large corporations can leverage their resources to mitigate impacts, whereas smaller businesses bear the brunt of increased costs and disrupted supply chains.

Port of Los Angeles Corporate Structure and Staffing Challenges

Delving into the operational aspects, Gene discusses the corporate structure of the port and the role of labor unions. He explains, “the dockworkers, the International Longshore and Warehouse Union, 15,000 strong members… are hired by the Pacific Maritime Association” (09:14). The port’s reliance on a unionized workforce introduces another layer of complexity in managing staffing amidst fluctuating import volumes.

Additionally, the port is experiencing a significant reduction in job openings for dock workers—down almost 50% over recent weeks—highlighting the broader economic implications of the tariff-induced slowdown.

Measures to Enhance Operational Efficiency

Reflecting on lessons learned from the 2021 port congestion crisis, Gene outlines the strategic measures implemented to enhance efficiency and prevent future bottlenecks. “During 2021, the average container that was to leave the port by truck sat for 11 days. Today, that average container is sitting for three days” (13:17). This drastic improvement in container turnover is attributed to enhanced collaboration with rail and trucking firms and a focus on speeding up cargo movement.

Gene emphasizes the importance of velocity in port operations: “It's about how fast we can unload a ship and get the cargo on and off the port property quickly” (12:44). These operational optimizations have enabled the port to handle more vessels and cargo efficiently, even during peak seasons.

Forecasting and Future Outlook

When asked about forecasting amidst the uncertainty of trade policies, Gene admits the challenges but remains cautiously optimistic. “Traditional forecasting is super difficult right now… But we are able to predict quite a bit” (10:33). Utilizing robust information systems and long-standing industry relationships, the port anticipates continued fluctuations in import volumes but remains steadfast in its strategic planning.

Looking ahead, Gene warns of potential consumer impacts: “With high tariff levels and increased prices to the buyer, folks just slammed on the brakes… So likely we'll see fewer selections on store shelves and online buying platforms and higher prices” (16:29). This slowdown in imports is expected to translate into limited product availability and elevated consumer prices, affecting everyday shoppers.

Corporate Branding in Logistics

In a lighter yet intriguing segment, Tracy and Joe explore Gene’s earlier comments about the pricing of container gantry cranes on Alibaba. This discussion reveals the critical role of branding in the logistics industry. Gene clarifies, “They come in different colors because companies have logos, they've got color schemes. Branding is really important in this business” (14:46). Different shipping companies use color-coded cranes to signify their brands, enhancing visibility and recognition across the global trading network.

Conclusion

The episode concludes with a recap of the challenges and strategic responses at the Port of Los Angeles. Gene Sirocca provides a sobering reminder of the interconnectedness of global trade policies and their tangible effects on supply chains and consumer markets. Hosts Joe and Tracy wrap up the discussion with humorous banter, highlighting the human element behind complex economic issues.

Key Takeaways:

• Reduced Import Volumes: The Port of Los Angeles is experiencing a significant drop in container ship arrivals due to high tariffs, impacting overall trade flow.

• Struggles of Small Businesses: Smaller importers are disproportionately affected by high tariffs, lacking the resources to mitigate increased costs.

• Operational Improvements: Strategic measures implemented since 2021 have enhanced port efficiency, reducing container turnover times and increasing cargo handling capacity.

• Consumer Impact: Ongoing import slowdowns are likely to lead to product shortages and higher prices for American consumers.

• Importance of Branding: Branding plays a crucial role in the logistics industry, aiding in the identification and differentiation of shipping companies.

This episode of Odd Lots offers a comprehensive analysis of the ripple effects of trade tariffs on one of America's busiest ports, providing listeners with valuable insights into the complexities of global trade and its direct implications on the economy and everyday life.

Notable Quotes:

• Gene Sirocca [03:19]: “Over the last seven days here at the largest port in the Western Hemisphere, we've averaged five container ships a day. Normally at this time of year, it would be about 10 to 12 ships in port every single day.”

• Joe Weisenthal [05:00]: “If you're a big retailer, maybe you can like take the risk… But for smaller ones… that's probably not enough certainty.”

• Gene Sirocca [05:45]: “They didn't have the wherewithal in some cases to be able to front load, inventory, push carrying costs out or get extra warehousing.”

• Gene Sirocca [13:17]: “During 2021, the average container that was to leave the port by truck sat for 11 days. Today, that average container is sitting for three days.”

• Gene Sirocca [16:29]: “With high tariff levels and increased prices to the buyer, folks just slammed on the brakes… So likely we'll see fewer selections on store shelves and online buying platforms and higher prices.”

Produced by Carmen Rodriguez and Dashiell Bennett, with contributions from Moses Andam and Kale Brooks. Sound engineering by Blake Maples. For ad-free listening, Bloomberg subscribers can access all podcasts through Apple Podcasts.