The Pacific Maritime Association (PMA) today issued the following update regarding continued union slowdowns and work actions at the major West Coast ports. The union actions are tied to the ongoing negotiations for a new coast-wide labor contract. Negotiations began in May for the contract that expired July 1, and talks have been occurring almost constantly for the past six months.
News / Industry News
More than 40 percent of the goods that come into the United States from overseas come through the twin ports of Los Angeles and Long Beach. That fact alone gives thousands of truck drivers who haul those goods from the ports to warehouses considerable leverage with big companies (like Walmart, Cosco, and Home Depot) whose goods are mostly made in Asia as well as with the shipping companies, the municipal Harbor Commission which oversees the port, and the trucking companies who employ the drivers.
The Freight Transportation Services Index (TSI), which is based on the amount of freight carried by the for-hire transportation industry, rose 0.3 percent in September from August, rising for the third consecutive month, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics. The September 2014 index level (121.5) was 28.5 percent above the April 2009 low during the most recent recession.
For months, contract negotiations between a powerful union and multinational shipping lines progressed amicably in public, even though roughly 20,000 West Coast dockworkers labored without a contract.
Now the public harmony has been shattered, raising fears that a strike or lockout could close ports up and down the coast and cause economic pain.
“Import cargo volume at the nation’s major retail container ports is expected to slow down this month following record levels seen in September and October as retailers rushed to bring merchandise into the country ahead of a possible shutdown of West Coast ports, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.”
“As predicted, the transportation ecosystem is finding itself in turmoil as freight shipments, particularly imports, climb in anticipation of a stronger holiday shopping season this year. The real story, however, is that the cargo is having trouble entering the country and moving quickly to final end users. Port congestion, especially on the West Coast, is causing trouble for retailers attempting to stock their shelves for the season kickoff on Black Friday. All of this contributed to domestic freight shipment activity dipping again in October, while total freight spending rose slightly.”
Strong cargo volumes continued into early November at the Port of Long Beach, resulting in delays due to a shortage of truck trailers, but underscoring this year’s rebound in international trade and pointing to an economic upswing.
On Thursday, November 6th, the Pacific Maritime Association (PMA) released a press release accusing the International Longshore & Warehouse Union (ILWU) of now targeting the ports of Los Angeles and Long Beach. The PMA indicates in their statement that since Monday November 3rd, the ILWU has been “refusing to dispatch hundreds of qualified, skilled workers for critically important positions transporting containers in terminal yards at the nations’s largest port complex.”
“Total nonfarm payroll employment rose by 214,000 in October, and the unemployment rate edged down to 5.8 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places, retail trade, and health care.”
As contract negotiations resume today between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU), a war of words and allegations has escalated in the trade press. In a statement released this morning, the ILWU said the PMA “dishonestly” accuses the union of breaking a spoken agreement that port operations would continue under the auspices of a temporary contract extension.