AYESHA RASCOE, HOST:
Major ports up and down the West Coast are bracing for the full impact of the Trump administration's tariffs. The number of ships arriving is expected to drop dramatically, and the effect will be especially striking in Southern California. Los Angeles and Long Beach are the country's two busiest ports, processing around a third of all cargo containers arriving from overseas, a huge number of them from China. Joining us now is Mario Cordero, CEO of the Port of Long Beach. Welcome to the program.
MARIO CORDERO: Well, thank you for inviting me here, Ayesha.
RASCOE: So can you give us a sense of what's happening right now with your port?
CORDERO: Well, I think the story of the day for the Port of Long Beach is we're starting to see less vessel arrivals, which means less cargo. And of course, that translates to potentially less jobs and an impact to consumers. In other words, they may not have their products in a couple months unless things change.
RASCOE: And so, I mean, how much of a drop are you seeing right now?
CORDERO: Well, right now, the first drop that we're seeing actually is going to be here in the month of May. Keep in mind that for the first quarter 2025 - that is, January through March - the Port of Long Beach moved more container cargo than any other port in the country. So we were certainly on a very high-volume movement. April was decent, but now May, we're going to start seeing reduction. For the second half of 2025, we're looking to at least a 20% reduction in volume.
RASCOE: And how do you know that? Is it because of, like, contracts, or are these things planned out way in advance?
CORDERO: Well, there's two metrics that give you an indication. One, the diminished bookings that are coming out of Asia - there are importers now here in the USA that are not calling for orders from Asia. They're waiting on the sideline to see where this tariff number falls or more clarity because right now, there's a lot of uncertainty in terms of what that tariff number will be at the end of the day. No. 2, as of right now, our numbers through the month of June indicate that the carriers have had 34 blank sailings. What that basically means, 34 less vessels that are coming into the port complex.
RASCOE: And what impact does this have on the wider port economy?
CORDERO: Unless things change, you are going to have an impact in terms of job reduction across the supply chain, whether it's dock workers here at the port, truck drivers, people who work in the warehouses and/or on a logistics supply chain. So we already have seen what that is in the COVID-19 crisis, if you recall when, during the COVID years, particularly in the latter part of 2020, 2021, everything came to a stop, so to speak.
RASCOE: Those supply chain disruptions during COVID led to higher prices. And then there were also concerns about, like, Christmas presents and stuff like that, whether you would just be able to get basic supplies. Is that something that could happen this time around?
CORDERO: There is a potential of that occurring. So let me give you an example. In this industry, when we talk about peak season, that is the time of year where cargo really comes in at higher numbers. Every year, annually, that starts around July, and the reason is because from July to August, you're looking to advance products coming into the country in preparation for the back-to-school spending and the holiday spending. Beginning July - that's going to be critical because if you're a shipper and you're importing holiday type of products or even back-to-school, are you going to be paying 10%, or are you going to be paying 46% of tariffs or, in the case if it's from China, 145%? It's a scenario right now that time's ticking, so to speak, to get clarity and remove uncertainty, and I think that's all the business sectors are asking for at this point.
RASCOE: So the Trump administration is saying it wants to do a deal with China. If that happens, do you think that there will be a lasting impact of these tariffs, or if they come out with a deal, will everything kind of just get back to normal?
CORDERO: Well, No. 1, we've been living in a tariff environment. If you recall, in the first Trump administration, there was an implementation of tariffs. The Biden administration basically followed that. I think the question now is, the percentiles that we're talking about are sometimes prohibitive, specifically the smaller shipper, the midsized shipper and even the larger beneficial cargo owner. And you start seeing every day you listen to the news, CEOs of major companies are concerned. Some of the bigger players in terms of shipments - they're looking to perhaps a 100 million to a 300 million additional cost on products. And that's concerning because it's going to get passed down to the consumer. So if you get an example of a Nike shoe, so to speak, that shoe that could cost you $125 could now be at least $165.
RASCOE: You said the time is ticking. Is there a time by which you think that companies need these tariffs, whatever deal is going to be made, to be made so they have that clarity? Like, is it by July? Is it by June? When does this need to be done?
CORDERO: Actually, the month of May is very key because when you start booking shipments of products, you do that two months in anticipation. So if you're looking to getting a product in July, you have to start making this order now. So I think the inflection point here is now in the next 30 days.
RASCOE: That's Mario Cordero, CEO of the Port of Long Beach. Thank you so much for joining us.
CORDERO: My pleasure. Transcript provided by NPR, Copyright NPR.
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