The Pacific Maritime Association (PMA) and dock workers have been locked in labor negotiations for the last nine months. The PMA, represents 29 West Coast Ports who have all been affected by these negotiations. Specifically, the ports are experiencing significant slowdowns and currently only operating at 50-60% capacity. Due to the high demands from the International Longshore & Warehouse Union (ILWU), the ports have also experienced complete shut downs at times, causing a great deal of congestion. It has been reported that port workers have threatened to strike and are creating this slowdown as a statement to the PMA.
On Monday, the U.S. Secretary of Labor, Thomas Perez, was sent to assist the PMA and ILWU reach an agreement soon. The White House made a statement on Saturday urging both parties to resolve their differences stating, “Out of concern for the economic consequences of further delay, the President has directed his Secretary of Labor Tom Perez travel to California to meet with the parties to urge them to resolve their dispute quickly at the bargaining table."
Slowdowns and work stoppages of this degree creates a ripple effect, which affects everyone from the manufacturer down to the consumer. Delays at these ports are causing increased disruptions to all industry supply chains; however, manufacturing, retail, agriculture and the automotive industries are directly impacted.
The West Coast Ports handle 44% of container cargo in the US, which accounts for 12.5% of America’s Gross Domestic Products. As a result, the slowdowns have a direct impact on the US economy.
The last labor-management dispute at the West Coast ports occurred in 2002 and resulted in a complete shutdown for 10 days. It was estimated to cost the US economy nearly $1 Billion per day. A 2015 lockout could cost the economy $2 Billion per day.
It is reported that dozens of ships are backed up and sitting idle in the Pacific Ocean waiting to port. It is clear that government intervention is required to resolve this situation; however, even if they come to an agreement, it will take roughly two months to clear the backlog.
While gts recognizes that each shipment is unique and typically require specific instructions, we can offer recommendations which can help ease the slowdowns and potential impact.
- Provide Shipping Information ASAP - The best way to prevent congestion impact is to provide shipping information as early as possible in order to secure proper space with the carriers. This will also allow additional time if other unforeseen delays arise and allow time to find alternative routing options.
- Utilize Other Ports - Another option is to utilize other ports such as the East Coast, Gulf Coast ports or there are additional options in Vancouver, BC.
- Explore Other Modes - Air Freight is a third option for smaller or more urgent shipments is another great option.
If you have any questions or concerns regarding the West Coast port slowdowns, or would like to further discuss a specific shipment please contact us.