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The
International Longshore and Warehouse Union (ILWU) and the
Pacific Maritime Association (PMA) employer group, which
declined comment for this report, said in a rare joint statement
on June 14 that they were not planning any work stoppages or
lockouts that would worsen supply chain logjams.
That matters because when the contract expires at 5 p.m.
PDT(0000 GMT Saturday), so does its "no strike" clause, said
Peter Tirschwell, vice president of maritime, trade & supply
chain at S&P Global Market Intelligence.
History suggests a last-minute extension is not likely. The
union in November rejected a one-year contract extension, saying
its members had already granted a three-year extension to the
current contract.
The National Retail Federation, which represents companies like
Walmart and Target, and the Agriculture Transportation
Coalition, which includes citrus, hay and nut exporters, are
among the industry groups pressing for a quick agreement.
Meanwhile, wary shippers are not taking any chances. They are
routing cargo away from the West Coast to avoid potential
labor-related slowdowns, particularly at the nation's busiest
seaport complex at Los Angeles/Long Beach that handle nearly
$500 billion in cargo annually. That is driving up their costs
and contributing to backups at ports in New York/New Jersey,
Savannah and Houston. [nL2N2WN1YT]
Automating the movement of containers at the ports, resulting in
fewer jobs, appears to be a key issue in the talks, which have
been ongoing since May. While both sides have not identified the
issue specifically, they have released dueling studies on the
impact of automation and traded barbs in the media.
In an interview with Reuters this week, U.S. Labor Secretary
Marty Walsh said he checks in weekly with ILWU and the PMA. They
"continually tell me that we're in a good place. It's moving
forward," Walsh said.
The last West Coast port labor contract negotiation broke down
in 2015 after nine months of talks. Dockworkers stopped work for
eight days, a move that gummed up U.S. supply chains and
siphoned an estimated $8 billion from the Southern California
economy.
U.S. President Joe Biden met with the ILWU and the PMA in Los
Angeles on June 10.
Any disruptions at Pacific Coast ports that handle almost 40% of
imports to the United States could send transportation costs
even higher, exacerbating pressure on a softening economy that
is sinking Biden's approval ratings.
"We've never had a White House that is all over these
negotiations the way they are now," Tirschwell said.
(Reporting by Lisa Baertlein in Los Angeles; Editing by
Marguerita Choy)
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