EB-5 Risk Alert: Jobs disappear at American Logistics while business booms at the ports

During what should be have been its busy season, business seems to be slower than ever at American Logistics International.

Perhaps relatedly, the driver workforce at American Logistics has reached an all-time low since cutbacks earlier this year. The number of drivers has plunged almost 40% over the past year, to only about 50 drivers from 80 drivers a year ago.

We have reported previously on the downturn in business and drastic cutback in the workforce at American Logistics in early 2013. But reports from drivers indicate that rather than bounce back with seasonal increases in cargo traffic at the ports, the slump has worsened.

Of particular concern for EB-5 stakeholders, the company’s direct-hire employee driver work force has dropped from at least 60 to about 50 since April of this year.

As work slows, drivers left in the dark: Business may be even slower than the decline in job numbers suggests. Drivers who are still employed report that they are receiving much less work volume than they previously had. One driver stated, “A year ago at this time, I was working on average 5-6 days a week. This year, I have only been getting 3-4 days a week on average.”

Another driver echoed his sense of confusion as to why business was flagging, stating, “There’s no communication with management. We don’t know why they’ve cut the workforce.”

Growth at the ports, new lows at American Logistics: The downturn at American Logistics is all the more striking given that it coincides with peak season for its industry – providing trucking services to and from the twin Ports of Los Angeles and Long Beach, the busiest container ports in the country.

While American Logistics has posted double-digit job loss, the Port of Long Beach has seen double-digit growth, with imports for July – September up 16.1% from the same period a year ago.

This continued downward trend – and especially the decline in job numbers – raises serious concerns for EB-5 stakeholders in American Logistics. Current or potential EB-5 investors and their advisors should consider:

  • Why does business appear to be dwindling at American Logistics?
  • How will the continued decline in the number of full-time employees impact current EB-5 investors in reaching their investment and immigration goals?
  • How will American Logistics maintain healthy job creation at its newer EB-5 projects?

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