A survey of 138 shippers last week by the Journal of Commerce showed that 65% said they planned to ship less cargo through the U.S. West Coast through 2016, with a similar percentage planning to permanently reroute some cargo.
The amount of cargo that moved through the Port of Long Beach in January took a nearly 19 percent nosedive compared to the same month last year because of ongoing congestion and labor strife, officials said late Wednesday.
The Port of Oakland shut down operations Thursday as longshore workers attended a union meeting instead of showing up to work amid a protracted labor dispute with shippers.
The labor dispute between West Coast ports and the longshormen’s union is having an effect on the California economy. Nick Vyas directs the Center for Global Supply Chain Management at the University of Southern California. He estimates California has lost between a half billion and a billion dollars since the port labor dispute began. And he says state leaders should take an active role in trying to end the dispute.
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.”
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.
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.
Currently, port officials say roughly 20 percent of all the cargo moving through the country goes through the ports of Long Beach and Los Angeles – the busiest in the nation. But without change, their share could drop.
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.
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.
Truck drivers who work at the ports of Los Angeles and Long Beach walked off the job Thursday to protest two trucking firms they accuse of wage theft, according to the International Brotherhood of Teamsters, which organized the action.