The Port of Los Angeles Executive Director Gene Seroka joins Yahoo Finance Live to weigh in on how Red Sea shipping disruptions have impacted global trade routes. In light of recent attacks, he says shipping companies have made "subtle moves" west "to avoid some of those hot spots."

While some East Coast-bound cargo gets rerouted through LA to circumvent danger zones, Seroka doesn't expect a major surge locally. With vessel movements visible weeks in advance, the port has time to "prepare for cargo uptakes" from route diversions.

However, Seroka notes attacks "really gum up the works in the supply chain." Unlike the West Coast, regions like Europe rely solely on Egypt's Suez Canal for Red Sea access. Ongoing incidents that force new routes can add extended transit times and costs exceeding $1 million per voyage.

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Editor's note: This article was written by Angel Smith

Video Transcript

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AKIKO FUJITA: Shipping companies are scrambling to find alternate routes as their vessels continue to face attacks from Houthi militants in the Red Sea. That's leading to widespread disruptions with 30% of cargo headed for US ports on the East Coast typically passing through the Suez Canal. The Port of LA is looking to pick up some of the load even as it faces a surge in shipments stemming from another disruption, low water levels in the Panama Canal. Let's bring in Gene Seroka. He's Port of LA's executive director.

Gene, it feels like we're getting a lesson in how interconnected global shipping is right now when you consider all of the disruptions we've been watching. Let's start with the Suez Canal. What's been the direct impact on the Port of LA?

GENE SEROKA: Good morning, Akiko. On the Suez Canal, limited. I just came back from a four-city tour in Asia, started off in India then went to Vietnam and Indonesia. And what shippers and exporters are telling me is that they're starting to make some subtle moves to the West Coast trying to avoid some of those hot spots, but not a deluge of freight coming our way. What I can tell you is at the Port of LA is running at about 75% of capacity. So for those companies that need assistance, we're here.

RACHELLE AKUFFO: And so, Gene, I mean, the Port of LA the busiest and largest port in the United States. How do you prepare for the potential influx as we are seeing some of these diversions coming from the East Coast ports?

GENE SEROKA: Well, Rachelle, it's not going to be a huge surge. All of our simulation and from the port optimizer, our port community system, we could see upstream about 40 days before a vessel is arriving here in Los Angeles. So it allows us to prepare our great skilled labor, our land, and machinery to get ready for cargo upticks.

That said, the month of January will be very strong when the numbers are tallied. And February looks good mostly on the heels of everyone preparing for traditional holidays in Asia, specifically lunar new year. So we're seeing that little bit of a bump. And leading into March, that'll start to squelch a little bit into our traditional slack season. But we're ready on the ground here in Los Angeles.

AKIKO FUJITA: Gene, let me get back to those conversations you had in Asia. I realize the Port of LA is not going to get a huge surge coming out of the Suez Canal. But I'm curious, if some of those companies have to reroute and potentially come through the West Coast, how much does that add to time and shipping costs? Do you have any gauge on that?

GENE SEROKA: Yeah, couple pieces here. Right now with the diversions that are taking place on traditional Suez routes-- and I go back to my days working in the Middle East when we had Somali interests going after vessels, tankers, and container ships and working very closely with NATO and other allied forces to protect our crews, cargo, and assets-- this really gums up the works in the supply chain. And as you said, about 30% of container trade is moving through the Suez.

2/3 to 70% is going to Europe. Europe's lifeline to Asia is through the Suez Canal. Those alternate routes going around the Horn of Africa add another 14 plus maybe even 21 days to transit times and some accounts have said more than $1 million to the vessel voyages. Now, all of that aside, routing cargo from Bombay or Mumbai over Singapore and up to Los Angeles is going to be a quicker route and probably more cost effective at this juncture, than the spot rates that are increasing through these hot spots.