Live on Bloomberg TV

00:00We're talking now. Gene Stroke the executive director of the Port of Los Angeles he comes to us from D.C.. Gene you had a front row seat to sort of whatever disruptions are happening from the lockdowns there willing lockdowns in China. What are you seeing. Good morning Alex. We've had our best first quarter and second best April in the history of the port of Los Angeles. And mayor rivals look strong as well. What we've seen are the number of ships leaving Asia including central China at or about where they've been throughout the eight week lockdown in Shanghai. Much of the manufacturing community is west of the city and cargo is finding its way through to the young Shawn deep sea port. And if not it's going down to neighboring Port Ningbo which is up 25 percent over this past two months. We're watching day and night. But so far the cargo flow seems to be very consistent. So Jeanne is the supply side crisis that we've all been so focused on starting to go away now. Are we moving on from it or do you think this is going to be still a problem for a while. Good afternoon guy. This is going to take some time. There an episode just about every day that impacts us in the supply chain whether it's on the ground the atrocities in Ukraine impacting energy and agriculture goods flow the lockdowns in Shanghai eight point three percent inflation producer prices going up 11 percent. All of this is in the supply chain equation. But one area that's really looking good right now is that our output from the port of Los Angeles into the U.S. domestic economy. Two hundred thousand containers on a rolling 30 day basis. That's the highest it's been since we've begun recording this important information. Jean what's your visibility with that going forward. Because a lot of the reading now is becoming that inflation is no longer just a Fed problem. Inflation is the consumer's problem at some point and demand destruction is inevitable. What's your visibility into that. That's right. We see purchase orders Alex going out 90 to 120 days. The next several months looks solid really on the heels of that Q2 replenishment strategy that many importers retailers and home improvement stores have been executing. We see an earlier than normal peak season with landings starting at the Port of Los Angeles the end of June early July. But we'll have to watch the consumer confidence index down. Yep. Retail sales look at a little bit choppy right now but all indications from the retailers are strong and continued shipment volume as we look forward. A 30 tomorrow. Eastern we're going to get that retail sales number. We'll get to get update on what is happening this week from that space Jane. The question that everybody is trying to figure out. Know you've given us a little bit of a hint of that. Is the consumer going to crack here. Do you get any sense. Judging by what you're seeing at the moment that the U.S. consumer is slowing down. Do you see any hints in the numbers that you're seeing that this is an economy heading for a recession. As most of this cargo is a leading indicator to the U.S. economy. Nothing just yet. But by definition with the first quarter GDP declining by one point four percent you're halfway to an economic definition of recession. We've got to continue to see this moving forward. But right now with record levels of savings in U.S. consumers accounts there's really not a look here that says consumer buying is going to slow down any time soon yet. We've got to watch those April numbers. This is typically a slower period in time for this activity. Jeanne last week wage talks started between International Longshore and Warehouse Union. Can you give me some insight into how they're going. When an agreement might be reached and what you're looking at both sides have seasoned negotiators at the table. Alex the contract expires at the end of June. Most of us see negotiations going past that and that's been fairly traditional. So no need for worry right now at this point in time. The dock workers are still going out in record numbers and we'll continue to do so. We've talked to both the leadership of the workforce of the ILWU as well as of the employers associations in recent days and weeks. And they're going to make sure that all this cargo continues to move. They understand these West Coast 29 ports represent about 9 percent of the nation's GDP and everyone's watching us. Jeanne a high fuel prices having an impact. And if so where. Well fuel is across the board in this transportation sector from trucking prices to the railroads and a high cost component of the liner shipping vessels. With the price per barrel over one hundred and ten eleven dollars just today everyone's watching this particular area as well. We've got to be more efficient. And it just adds to the number of components with rising cost structures in this supply chain. Very important. All of us. Pair that with the wage conversation that we've been talking about. Wages have been rising but not at the same pace as inflation. And you're kind of dealing at the front end with all of that. How do you think the pendulum is going to swing. Is it going to swing in terms of wages getting higher than inflation or as inflation is going to start to eat away at everything. Well Alex this is really the big question at hand because we've got about eleven point seven million jobs open in the United States alone. Hiring that marginal worker at that higher price creates a different wage structure for all that we're looking for. As we've said on the docks our workers are out there full out six days a week on average since the pandemic began. But we've got to find ways to attract recruit and retain folks in the trucking and warehousing sectors. The rising cost of wages compared with inflation are going to be a gap that families see at their dinner tables every night.

No schedule data available.

Supply Chain Issues Will Take Time to Sort: LA Port Chief

Cargo is flowing out of China at a consistent pace says Gene Seroka, Port of Los Angeles, Executive Director. He says this means there's nothing pointing at a recession in the US. He also talks about supply chain issues across the globe. He speaks on "Bloomberg Markets: European Close." (Source: Bloomberg)

More From bloomberg-markets-european-close
All episodes and clips

Bloomberg Technology
The only daily news program focused exclusively on technology, innovation and the future of business from San Francisco. Hosted by Emily Chang.
More episodes and clips