The shipping industry made a collective sigh of relief as word came on January 5th that Federal Mediators were being brought in to help the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) to reach a labor settlement.  Unfortunately, even with mediator assistance, no reported progress had been made.  In fact, reports of what is actually happening at the bargaining table in San Francisco reveals that the two parties are no closer to an agreement than before.  ILWU work slowdowns have reached severity to the point of gridlock at U.S. West Coast terminals.  The industry looks on in fear of history repeating itself like in the ten-day lockout of 2002, which led importers and exporters to diversify their supply chains and avoid over-reliance on West Coast ports.  A lockout is when union workers are denied access (locked out) of the terminals by employers, which would freeze cargo movement and eventually cause diversions.

As of this publication, backups on West Coast ports have reached unsustainable levels with vessels lining up offshore at the Ports of Los Angeles and Long Beach.  Currently, there are 10 ships waiting to berth and there is great concern that cargo movement will remain stagnant or worsen as importers push to get product into the U.S. in advance of the two-week Chinese New Year holiday that begins February 19th.  In their latest round of mutual accusations, the PMA alleges that the ILWU has been using work slowdowns to gain leverage at the bargaining table, while the ILWU points to the truck chassis shortage as the main cause of delays.  The ILWU has also stated that the PMA’s proposal to end night shifts at terminals is an attempt to also gain leverage in negotiations, and is causing an impasse between the two parties.

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