The busiest port in America is no longer on the West Coast

New York(CNN) For the past 22 years, the Port of Los Angeles has been the busiest container port in North America, moving around 10 million cargo containers filled with goods for Americans and bringing in roughly half a billion dollars in revenue each year to the state of California. But for the past three months, the Port of New York and New Jersey has been No. 1.

This rerouting of the US supply chain is a bid to get goods to consumers faster and cheaper. The vast majority of foreign-made goods, from furniture and apparel to auto parts, all come to the United States on cargo vessels that unload at US Ports.

LA isn't happy about losing its title to its cross-country rival.

"We've got to get that cargo back," said Gene Seroka, executive director of the Port of Los Angeles, in a recent press briefing.

Since August, imports into the two major West Coast ports -- Los Angeles and Long Beach -- have declined. Cargo volume at the Port of Los Angeles is down by 25% in the last three months compared to last year, and down by 17.3% on the five-year average. That cargo is now flowing into New Orleans, and also East Coast ports like Savannah, New York and New Jersey.

"The record levels of cargo continue," said Rick Cotton, executive director of the Port Authority of New York and New Jersey, at a press briefing last month.

"Our goal is to keep as much of that business as possible," said a spokesperson from the Port of New York and New Jersey.

The shift stems from fears about an unresolved labor contract between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). Around 20,000 dockworkers at West Coast ports, including Los Angeles and Long Beach, have been working without a contract since July 1. Retailers are nervous that the lingering negotiations could lead to a strike, despite reassurances from both parties that this won't happen. A US freight rail strike nearly sent the US economy into a supply chain spiral -- raising the stakes for what a port strike could do. A dockworker strike, which both labor parties say they are adamant about avoiding, would cripple the West Coast and US supply chain -- sending even more volume and pressure to other -- smaller - East and Gulf Coast ports.

"We've dodged a rail strike and the retail supply chain should be able to easily handle the remaining weeks of the holiday season," said Jonathan Gold, Vice President for Supply Chain and Customs Policy at the National Retail Federation in a statement. "The uncertainty [is what] retailers and other shippers are afraid of. They don't want to be stuck in a situation where there could be a disruption because of the labor situation or something else," Gold explained to CNN.

For now, the Port of New York and New Jersey says it has been able to handle the extra cargo with no delays and is not looking to give up any new business. The winter months are typically the slow season for imports, but in February cargo traffic will pick up again after the Chinese Lunar New Year as retailers will already be looking to bring back-to-school and holiday shopping items in to the United States.

Adding to the shift to East Coast ports were lessons learned from a nightmare traffic scenario that played out in the Pacific Ocean during 2021's peak holiday shopping season -- resulting in empty shelves for retailers.

Goods became stuck off the coast of California sitting on a record 109 container ships in January, waiting for weeks to offload at the Ports of Los Angeles and Long Beach. Retailers and importers cannot afford that kind of delay -- and started shifting their supply chain routes to other US ports. The jam at the West Coast ports delayed Americans getting goods and sent prices higher as demand outpaced supply.

"I think there's a real recognition of the need to have that diversification and not rely on one port versus another but have multiple ports they use," said Gold.

But the Port of Los Angeles could still retain its title for the year, since it is on track to have its second-best year on record behind last year's record-breaking 10.6 million containers that passed through the port. But until the labor dispute is resolved on the West Coast, it will be a challenge to lure importers back.

Today there are just four cargo vessels at the Port of Los Angeles. It represents a major shift in the US supply chain and where global cargo is coming in to the country. The amount of cargo coming into the Port of New York and New Jersey is up 10.6% in November year to date from 2021 -- which was a record year. The port estimates 85% of those imports were supposed to go to the West Coast.

"Despite this flood of cargo -- [it's] been handled extraordinarily well. We expect that to continue," said Cotton.

In October, there were 20 canceled vessels coming into the Port of Los Angeles, with 20 more for November and December, according to Seroka. The financial implications can be costly.

"If cargo is down 25% year on year, the jobs could be down right now 20% or 22%. It may not be exactly one for one, but you've got a downstream [effect]," Seroka told CNN.

With less revenue coming in, Seroka said it limits investments in port infrastructure. The marine terminals pay taxes to the city, county, and state -- and, if business is down, that's less revenue coming in to municipalities.

"The economic impacts are far reaching when it comes to us losing our traditional share [of cargo]. That's a real concern," said Seroka.