You can debate what’s causing gridlock at the ports of Los Angeles and Long Beach; The dockworkers’ union blames the shipping companies, and the shippers blame the dockworkers. But this much is for sure: increasing delays in moving cargo are getting costly for California exporters, especially for growers, which are experiencing the worst delays they have seen in 13 years.
Why isn’t there a national conversation about the West Coast port slowdown? That’s exactly what Peter Friedmann, executive director of the Agriculture Transportation Coalition, wants to know.
As a result, companies affected by the slow ports are finding ways to import their product without using West Coast ports, including the ports of Seattle and Tacoma. In California, agriculture groups have warned of long-term economic damage if the slowdowns persist.
Shipping companies said they will stop unloading ships at West Coast ports for four of the next five days because they don’t want to pay overtime to workers they allege have deliberately slowed operations.
Oakland port officials have said the labor dispute “needs to be settled … quickly” to avoid further economic harm as businesses suffer from cargo delays. “Central Valley farmers can’t ship their produce. Small business owners can’t get goods to put on the shelf. Harbor truckers can’t do their jobs. Everyone is suffering,” the port said in a statement on Wednesday. “If the situation worsens … if West Coast ports shut down, the U.S. economy and the global supply chain will be jeopardized.”
In the offer, longshore workers receive an annual income of $147,000 with the option of a 3-to-5 percent increase per year and a fully paid health care plan known as a “Cadillac plan.” The Affordable Care Act mandates that the PMA pay a premium on that plan: $35,000 per year, per worker.
A months-long stalemate in contract talks between the Pacific Maritime Association and the International Longshore and Warehouse Union, both based in San Francisco, has clogged major ports in California and is having a negative economic impact on Central Valley growers and other Northern California businesses such as Devine Intermodal.
In an open letter, the owners Alan Beatts and Jude Feldman explain that they can’t pay San Francisco’s new $15 minimum wage (a minimum wage that they support). That increase will raise their payroll costs by 39% and their overall costs by 18% — and since they can’t raise the cost of their books (because they’re pre-priced, and retail priced books are already a tough sell in the age of Amazon), the only way they could cover the increase would be to stop paying themselves, or fire almost everyone and work insane hours. The cafe attached the store will stay open for the foreseeable, since those prices are flexible and can be raised to account for their increased overheads.
Meanwhile, frustrated exporters and importers will find other routes. In a recent survey by the Journal of Commerce, 60% of shippers said they had begun redirecting cargoes away from America’s West Coast ports. Once that business leaves, it may never return. Western ports have already lost market share to the East Coast since 2002, when failed labour talks led to an 11-day lockout and a total shutdown.
This comes when egg demand is growing, in part because soaring meat prices have caused Americans to turn to other foods. Per capita consumption is expected to reach more than 260 eggs this year, the highest since 1983, according to the USDA. The poorest consumers have been hit hardest by the price spike because eggs have traditionally been a cheap source of protein.
Locally, logistic jobs increased and dockworker pay surged as businesses throughout the United States ordered more products from Asia to meet growing demand at home. Cargo volumes at the neighboring ports climbed nearly 4% from 2013 to 15.2 million container units, making 2014 the third-busiest year on record, behind only 2006 and 2007.
Sales at retailers and restaurants decreased a seasonally adjusted 0.9% in December from a month earlier, the Commerce Department said Wednesday. But that drop, the largest since last January, likely overstates the severity of the pullback. Some economists blamed technical factors such as seasonal adjustments, warning about potential revisions to the data or a rebound in coming months.
A labor dispute is apparently delaying American potato shipments at American West Coast ports, thereby limiting supplies in Japan. Labor disputes have resulted in protests in ports in California and the Pacific Northwest over the past couple years.
Mar’s ordinance requires businesses to pay employees for four hours if an employee is either on-call or sent home early, and mandates businesses to offer extra hours to part-time workers before hiring new employees. Chiu’s legislation calls on formula retail stores to post employees’ schedules 14 days in advance, give workers extra pay for changing a schedule at the last minute, and allow the same access to requests for time off and particular work schedules to part-time workers that they do for full-time employees.
In a letter to the Obama administration released Tuesday, the Agriculture Transportation Coalition of Washington, D.C., and its 61 signees said the delays at the West Coast ports, including Los Angeles and Long Beach, are having a “disastrous impact” on United States exports. Customers are cancelling their orders, the letter says, and getting new sources for their produce.