Downturn at LA’s Ports Could Imperil Clean Tech Startups

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
cargo ship on the ocean
Photo by Chris Pagan on Unsplash

This is the web version of dot.LA’s weekly newsletter. Sign up to get the latest news on Southern California’s tech, startup and venture capital scene.

For the most part, the “supply chain issues” that dominated headlines during the early days of the COVID pandemic and lockdown have started to ease. Major corporations have had time to adjust their schedules and routes to a new pandemic-era reality, and a still-slow Chinese economy continues shipping less overall freight to the rest of the world, freeing up bottlenecks and getting global commerce slowly flowing again.

While this is good news for consumers still desperately trying to get their hands on a PlayStation 5, not all of the news has been so positive, specifically for companies and workers tied to the local ports of Los Angeles and Long Beach.

As part of this global readjustment of the supply chain, and facing lengthy trucking and warehouse backlogs upon arriving in Southern California, many U.S. retailers and manufacturers figured out new shipping workarounds that moved business away from the region altogether. Ports on the East and Gulf Coasts have been steadily inheriting new business while the Los Angeles market loses out, and these trends seem unlikely to reverse even as China’s economy gears back up and shipping volume starts to approach pre-pandemic levels.

Exacerbating concerns about moving cargo through Southern California is the ongoing labor dispute between West Coast dockworkers and their employers. Though officials from both sides of the negotiating table have assured the press that they can reach a new contract without disrupting port operations, the situation has led to anxiety throughout the industry, and prompted some companies to begin diverting some freight around the West Coast, just in case. (The last time dockworkers and their employers had to work out a new contract – in 2014 and 2015 – it led to nine months of delays; the Obama administration ultimately intervened and forced through a new deal.)

While the Los Angeles and Long Beach ports combine to handle around 40% of U.S. imports from Asia – valued at around $469 billion a year – the actual amount of goods coming through has been dropping steadily. At various times over the past year, New York and New Jersey have briefly claimed the top spot as America’s busiest. With some retailers and manufacturers already investing in new facilities and processes at other locations across the country, it’s looking more and more like the changes may be permanent. One analysis by a New York investment firm predicted that West Coast ports could lose up to 10% of their overall cargo to destinations on the Atlantic coast.

On the most basic and immediate level, this has a direct impact on the local labor force. 175,000 Southern California residents are employed at the ports themselves or in directly related businesses. But a permanent downturn in local shipping would have far more significant and far-reaching ripple effects.

For example, the tremendous amount of freight coming into Southern California through the ports led to an explosion in the wider logistics sector, filling the Inland Empire with warehouses and fulfillment centers. Trucking has also remained a steady source of income for tens of thousands of local residents. Though the shipping backlog briefly meant a surplus of jobs for many of these workers, a permanent shift in cargo volume could force many to seek work in other markets.

Los Angeles’ predominance as a shipping hub has also led a number of technology companies and startups to cluster around the ports. An overall drop in traffic and revenue there could have devastating effects on a number of these efforts as well. San Pedro accelerator Braid Theory focuses specifically on the “blue economy” and ocean-related industries, working with startups in niche areas like port logistics, aquaculture and energy; less freight and traffic moving through the port could mean fewer potential partners and avenues for collaboration. Digital platform Dray Alliance builds solutions to make the movement of cargo from shipping containers to nearby warehouses more orderly and systematic. Their business naturally relies on a steady flow of freight coming in from foreign destinations to Los Angeles and Long Beach.

Gene Seroka, executive director of the Port of Los Angeles, remains confident that some of the traffic currently headed toward the East Coast will ultimately return to Southern California. To his view, skittishness about a possible strike or labor-related disruption to the ports has been driving a lot of these macro-level changes. He noted to Bloomberg in October that 2022 remained on track to be the Port of Los Angeles’s second busiest year. So theoretically, a resolution to the labor dispute, coupled with a permanent easing on the local backlog and related bottlenecks, could restore L.A.’s reputation as the nation’s #1 place to send your container ships.

Plus we still have the best tacos. - Lon Harris

Here's What Happened In LA's Entertainment Tech World This Week 🍿

A digital art show in L.A. merged auction with ecommerce.

Amazon’s new virtual studio aims to cut production costs.

Trump and the art of the poorly-timed celebrity NFT.

Social Media 📱

ChatGPT is all the rage, but will it cause more cheating in schools?

The latest Ticketmaster fiasco fuels more antitrust questions.

Influencers target Discord and Twitter in pump and dump scheme.

Influencers are outsmarting TikTok’s algorithm.

Clean Tech  ♻️

PG&E’s new pilot program will pay EV owners to send electricity to the grid.

CPUC votes to change compensation for rooftop solar energy.

Vinfast cars are coming to the U.S., but not as planned.

Space 🚀

Why SpaceX has a growing monopoly on government contracts.

We’ve accomplished nuclear fusion ignition, now what?

Listen Up 🎧

LA Venture: Crush Ventures’ Andrew Kahn on finding music tech’s next big thing.

Office Hours: Julia Boorstin on how female founders thrive.


Robots have made their way to California nursing homes.

FCTRY LAb raises $6M to continue expansion.

ChatGPT is all the rage, but will it cause more cheating in schools?

Get caught up on this week's career moves in L.A.'s tech world with our weekly roundup.

And check out our weekly 'Raises' roundup of the L.A. VC scene.

Subscribe to our newsletter to catch every headline.

How Women’s Purchasing Power Is Creating a New Wave of Economic Opportunities In Sports

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to and find him on Twitter @Samsonamore.

How Women’s Purchasing Power Is Creating a New Wave of Economic Opportunities In Sports
Samson Amore

According to a Forbes report last April, both the viewership and dollars behind women’s sports at a collegiate and professional level are growing.

Read moreShow less
LA Tech Week Day 5: Social Highlights
Evan Xie

L.A. Tech Week has brought venture capitalists, founders and entrepreneurs from around the world to the California coast. With so many tech nerds in one place, it's easy to laugh, joke and reminisce about the future of tech in SoCal.

Here's what people are saying about the fifth day of L.A. Tech Week on social:

Read moreShow less

LA Tech Week: How These Six Greentech Startups Are Tackling Major Climate Issues

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to and find him on Twitter @Samsonamore.

LA Tech Week: How These Six Greentech Startups Are Tackling Major Climate Issues
Samson Amore

At Lowercarbon Capital’s LA Tech Week event Thursday, the synergy between the region’s aerospace industry and greentech startups was clear.

The event sponsored by Lowercarbon, Climate Draft (and the defunct Silicon Valley Bank’s Climate Technology & Sustainability team) brought together a handful of local startups in Hawthorne not far from LAX, and many of the companies shared DNA with arguably the region’s most famous tech resident: SpaceX.

Read moreShow less