Monday, December 22, 2014

Holiday Holdup at the Docks

West Coast labor unrest continues to cause uncertainty for shippers importing from the Pac-Rim.

All they want for Christmas is a port that works.

Ongoing uncertainty over the labor situation at West Coast ports continued to dominate the shipping news as 2014 sputtered to an end with no end in sight for the negotiations dragging on between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) representing the port operators, in typically contentious fashion.

This labor action is a far cry from the grape pickers requesting a living wage and sanitary facilities in the fields. The average longshore worker earns $142,000 plus a benefit package worth $82,000. The union is fearful of trends including increasing automation of port operations, and the effects of mega-ships and mega-alliances on their bargaining position in the future.

With the ILWU agreement covering all the major ports in the American west, including the enormous Los Angeles–Long Beach complex and up to Seattle and Tacoma, the West Coast bottleneck creates a ripple effect that hurts shippers everywhere, not just those who depend on Pacific rim imports.

This year’s slowdowns came on top of a number of existing factors that, on their own, were creating the worst congestion Los Angeles-Long Beach has seen in years. A chassis shortage and the lack of a portwide pool led to shortages in trucking capacity. Multicarrier alliances calling at multiple terminals caused further strains on trucking needed to shuttle containers between terminals. Big ships created surges of cargo. And, volumes, fueled by the resurgent U.S. economy, grew.

New Year’s Day will mark six months since the previous contract expired, with growing calls for Pres. Obama to invoke the Taft-Hartley Act to keep operations running. As negotiations continued, neither side revealed any hint of when the new deal might be inked. But the prospect of six years of relative peace at the ports once they do would give shippers a Happy New Year. 

Kirk Shearer
800-989-0054 x103

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