Congestion at the docks dragged down cargo volume at the ports of Long Beach and Los Angeles for a second consecutive month in February, according to figures released Tuesday.
The official reason behind the closure was a “staffing dispute” between workers and port operators, said Port of Oakland communications director Mike Zampa. He did not offer further details.
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 Port of Los Angeles saw January cargo volumes fall nearly 23 percent compared with the same month a year ago, a result of the slowdowns and partial shutdowns that gripped the local ports during contentions contract negotiations between shipping lines and dockworkers.
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.”
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.
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.