After early assertions that the West Coast port dispute wouldn’t have a major impact on the flow of shipments, those promises seem to have gone by the wayside, as the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) are doubling down on their respective demands.
Employers, represented by the PMA, recently informed ILWU port workers that it will suspend the unloading of container and cargo shipments in the days ahead, living up to their vow to “strike with pay,” The New York Times reported.
On Feb. 12, the clash between the ILWU and PMA intensified, as shipping companies blocked dockworkers from sending and receiving shipments along the West Coast’s more than two dozen port locations. This has brought the flow of commerce to a virtual standstill, which has the potential to cause substantial harm to the U.S. economy, given that most shipments are sent out of the West.
“West Coast ports handle about 12.5 percent of the United States’ gross domestic product.”
Jonathan Gold, vice president of the National Retail Federation, indicated as much in a recent statement.
“With cargo volume growing as the economy continues to recover, the last thing we need is a port shutdown that would bring billions of dollars of economic activity to a halt,” said Gold. “Whether it’s in retail, manufacturing, agriculture or other industries, there are too many jobs that rely on the ports to let that happen. Labor and management need to do whatever it takes to reach an agreement and do it today.”
Port shutdown to cause domino effect
The labor negotiation, that shows no signs of being rectified in the near term, has the potential to wreak havoc to both small and large business owners. It may also cause issues for U.S. policies that the government has implemented.
For example, the U.S. Department of Agriculture (USDA) recently signed an agreement to ship more locally grown apples to China in an effort to close the trade deficit gap. The shutdown at the West Coast’s 29 ports could lead to massive delays. CBS News reported that Washington apple producers are losing $6 million a week because much of what they normally ship out is spoiling. The same goes for meat and poultry processors, losing $30 million per week, industry sources said.
Fruit growers say they’re losing millions because of the port contract negotiations fiasco.Meanwhile, much of what is typically sent out of the west has been diverted to the east, providing shippers with the outlets they need, but not without substantial costs and inconvenience.
Ben Hackett, founder of maritime consultancy firm Hackett Associates, said that now East Coast ports are being overrun.
“We have to admit that we underestimated the level of the switch,” said Hackett, according to the NRF.
The labor contract between employers and port workers expired this past July. Negotiations have occurred on a sporadic basis ever since, but little has been rectified, proven by the degree to which the situation has worsened.
“The continued intransigence by labor and management to reach a new contract is unacceptable,” the NRF said in a recent press release. “This stalemate is hurting American businesses, their employees and consumers.”
Livingston continues to track the ongoing labor negotiations and will post updates as they become available. We recommend you bookmark our West Coast port updates page and follow us on Twitter to stay up-to-date on the latest.