Concerns over the possibility of a built-up backlog of unloaded cargo containers at West Coast ports are rising as labor talks between dockworkers and their employers near the one-year mark, according to Bloomberg Government (subscription).
What’s going on: “Accusations arose [late last week] about whether a work slowdown was under way, temporarily closing some terminals. [N]ormal operations resumed at the ports of Los Angeles and Long Beach heading into the holiday weekend, Bloomberg’s Laura Curtis reported late Friday.”
- Negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association over a multiyear work contract began last May, but there are no signs of an agreement in sight.
- Last month, a coalition of interests including the NAM urged the White House to step in, warning that without intervention, there could be port disruptions with far-reaching consequences.
Why it’s important: A June 2022 NAM-commissioned economic study determined that if the labor uncertainty were to devolve into a full shutdown at only the ports of Los Angeles and Long Beach, it could mean a loss of $500 million a day, “with a hypothetical 15-day strike leading to 41,000 job losses,” Bloomberg reports, citing the NAM data.
- West Coast ports have already lost cargo to the East and Gulf coasts as shippers try to avoid disruption.
- Continued failure to reach an agreement will increase ship, truck and container congestion at East Coast ports, as well as spot shipping rates, and could require total shipping-infrastructure reorganization if it continues much longer.
What’s next? “Given the fragile state of the economy, it’s unlikely that the Biden administration would allow a labor battle around the ports to last very long,” according to Bloomberg.
The NAM says: “The ongoing negotiations between the ILWU and PMA have already created dynamic shifts in national port and cargo operations for all industrial shippers,” said NAM Director of Infrastructure Policy Ben Siegrist. “After years of pandemic-related supply chain difficulties, manufacturers now face continued operational uncertainty until a resolution is announced.”
- “As the NAM has fervently advocated, manufacturers need public and forthright engagement from the White House to draw this process to a close and prevent any further impact to our national economy.”