Deteriorating ILWU/PMA Negotiations Threaten West Coast Trade

Congestion at the terminals of Seattle, Tacoma, Los Angeles, and Long Beach continues to worsen as both the Pacific Maritime Association (PMA) and International Longshore and Warehouse Union (ILWU) appear to be no closer to resolving their ongoing labor dispute.  The PMA issued a new statement yesterday alleging that the ILWU is withholding skilled labor, which typically handles cranes that offload cargo from vessels in the ports of LA and Long Beach.  Now that the labor normally used to work the cranes is cut in half, it is expected that congestion at these terminals will only worsen as new vessels are unable to dock.  According to the PMA, overall productivity in the Pacific Northwest is down 40 to 60 percent and, with concurrent staffing issues in Los Angeles and Long Beach, it is expected that productivity there will continue to deteriorate as well.  With new vessels being unable to dock, the industry is seeing examples of Force Majeure situations, where vessels are re-routed and offloaded at a different ports.

With negotiations taking a very public and negative tone, a sharp contrast from the previous months, there is a real concern of a lock out by the PMA or a strike by the ILWU, which could potentially shut down all West Coast traffic.  The JOC has reported that a wide coalition of shippers and industry providers have again requested the Obama administration send in a Federal Mediator to get talks back on track and to avoid a work stoppage, which could be imminent.  “The threat of a West Coast port shutdown is creating high levels of uncertainty in a fragile economic climate which has forced many businesses to once again undertake contingency plans that come at a significant cost to jobs and our economic competitiveness,” the coalition said.

We will continue to closely monitor the situation and advise you of any important updates.