The possibility of a strike by union dockworkers at some of the most crucial ports in the world would hit the global supply chain hard, reported The New York Times.
The conflict centers on negotiations over a new contract for more than 22,000 union workers employed at 29 ports along the West Coast of the U.S. Almost 75 percent work at the twin ports of Long Beach and Los Angeles, the primary gateway for goods shipped from Asia.
The uncertainty radiates out to other segments of the shipping industry. With the contract for the International Longshore and Warehouse Union expiring at the end of June, truckers, logistics companies, and retailers await the outcome of the negotiations with trepidation.
The last time the union’s contract expired, in 2014, the result was pronounced turmoil at the ports. This time, odds for a deal without drama are “50-50,” said Jim McKenna, the chief executive of the Pacific Maritime Association, which represents the shipping terminals in talks with the union.
“The last four contracts ended up in some sort of disruption,” he told the New York Times. Major retailers that import products from Asia have been ordering extra goods as a hedge against a breakdown in contract talks, while stockpiling their wares at newly developed storage yards inside the ports of Long Beach and Los Angeles, said Sepehr Matinifar, vice president of commercial operations at Pacific Terminal Services, which operates the overflow yards.
Walmart alone has room for 4,000 shipping containers there, he said.
“There are concerns that if there is a strike, they are not going to have access to their cargo,” said Matinifar. He expressed confidence that a deal would be achieved. If the unions push too hard, he said, the shipping carriers will move cargo to fast-growing ports on the Atlantic like Savannah, Georgia.
“If they don’t come to a compromise, then freight will get permanently diverted to the East Coast,” Matinifar added. Full Story
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