Deadline Nears at West Coast Ports Which Could Disrupt Retailers

West Coast ports contract negotiations between shipping companies and dock workers deadline looms
There’s no need for outright panic at the moment, but retailers are becoming a little less at ease as labor negotiations between shipping companies and dockworkers for west coast ports continue. Those shipping ports cover 29 on the west coast from California to Washington state, including the two major shipping hubs of Los Angeles-Long Beach and Seattle-Tacoma. On one side sits the International Longshore and Warehouse Union (ILWU) which represents 13,600 port workers, and on the other side sits the Pacific Maritime Association (PMA), which represents the shipping companies and workers who operate the port terminals.

The current contract between the two expires on July 1, 2014 at 5:00 PM, but an agreement is not likely to happen before then. That’s not unusual, as it’s happened in the past for these types of negotiations to extended beyond the expiration date of the contract. The last such incident happened in 2008, and no strike or work stoppage occurred even after the contract’s expiration date. Still, anytime an agreement isn’t in place before the oled one expires gets those who would be most affected more than a little concerned.

The parties involved in this particular session expect the negotiations to continue into mid-July. At the moment, representatives from both the dock workers and shipping companies are saying negotiations will continue, and dock workers will continue to work as both sides negotiate, even if the current contract deadline passes.

While these are good signs, it’s still leaving a lot of major retailers like Walmart and Target nervous that an agreement still hasn’t been reached. Peak shipping season is approaching, and west coast ports handled more than 40% of all goods shipped by ocean that end up in the US. Any type of breakdown in the negotiations, or if the dock workers went on strike, could be devastating to the retail industry. This is especially true with the back-to-school shopping season, and even the holiday shopping season around the corner.

Problems have arisen before. In 2002, contract negotiations broke down, which resulted in a dockworkers lockout for 10 days at west coast ports. The estimated losses for that shutdown came to $1 billion a day to the US economy. It finally ended with then President George W. Bush stepped in and invoked the Taft-Hartley Act which forced the docks to be reopened and work to resume.

A closure today would be even more expensive. Recent studies indicate a work stoppage this year could hurt the US economy by the tune of $2.1 billion a day, with the loss of close to 170,000 jobs. The key areas of negotiation are about the cost of healthcare, and the use of outside contracted labor at the ports.

(Photo courtesy of Ingrid Taylar)

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2 Responses to Deadline Nears at West Coast Ports Which Could Disrupt Retailers

  1. Richard Evensen says:

    Screw these union thug punks. They expect to make 200K/year for operating simple machines. NEWSFLASH: The Panama Canal is being widened. You pukes will be left fighting for crumbs if you do not come to your senses. Your pay package should be cut by at least 30%.

  2. Angel says:

    You have no clue what you’re talking about. Union thugs?

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