The International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) employers’ group, which declined to comment for the report, said in a rare joint statement on June 14 that they did not plan to increase the number of walkouts or lockouts. Supply Chain Congestion..
That’s important because if the contract expires at 5 p.m. PDT (0000 GMT Saturday), its “no strike” clause will also expire, said Peter Drishwell, vice president of maritime, trade and supply chain at S&P Global Market Intelligence.
History suggests that a last-minute extension is unlikely. The union rejected a one-year contract extension in November, saying its members had already approved a three-year extension to the current contract.
Industry groups pushing for a quick deal include the National Retail Federation, which represents companies such as Walmart and Target, and the Agricultural Transportation Alliance, which includes exporters of citrus, hay and nuts.
Meanwhile, reluctant shippers are taking no chances. They shift their cargo from the West Coast to avoid labor delays, particularly the nation’s busiest port complex, Los Angeles/Long Beach, which handles nearly $500 billion in cargo annually. This increases their costs and contributes to delays at the ports of New York/New Jersey, Savannah and Houston.
Automating container traffic at ports, resulting in fewer jobs, appears to be a key issue in ongoing discussions since May. While neither side has addressed the issue, they have published conflicting studies on the impact of automation and the exchange of barbs in the media.
In an interview with Reuters this week, U.S. Labor Secretary Marty Walsh said he would contact the ILWU and PMA on a weekly basis. They “keep saying we’re in a good place. We’re making progress,” Walsh said.
West Coast dock talks broke down in 2015 after nine months of talks. The dockers stopped work for eight days, disrupting supply chains in the United States and draining $8 billion from the Southern California economy.
US President Joe Biden met with the ILWU and PMA on June 10 in Los Angeles.
Failures at Pacific ports, which handle nearly 40% of U.S. imports, would push up transportation costs even further, add further pressure to a weakening economy, and push Biden’s approval ratings down.
“We’ve never had a White House as out of touch with these negotiations as we are now,” Drishwell said.
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