Four dozen industry groups asked the White House on Tuesday to play an early role in impending contract negotiations between terminal management and dockworkers at West Coast ports to ensure there is no deterioration in cargo processing amid ongoing port congestion and trade uncertainty associated with the war in Ukraine.
The contract between the Pacific Maritime Association and the International Longshore and Warehouse Union is set to expire at the end of June. Automation and higher compensation are expected to be the top agenda items, with port operators interested in technology to address inefficiencies contributing to COVID-related backlogs and labor seeking a cut of record profits by ocean carriers, which control many terminals.
Contentious bargaining in 2001 and 2014 led to huge disruptions — a lockout and a work slowdown — that impacted the national economy for weeks until container piles could get delivered.
“Pandemic-related disruptions in the nation’s supply chain have been costly and inconvenient,” Brian Dodge, president of the Retail Leaders Industry Association, said in a statement that coincided with correspondence to the Biden administration. “Allowing a work slowdown or a shutdown to impact operations would amount to a self-inflicted wound, compounding congestion and leading to even higher costs on everyday products for consumers.”
U.S. West Coast ports — from San Diego to Seattle — account for more than 44% of container import traffic.
The letter from 49 groups, ranging from the powerful U.S. Chamber of Commerce and the Toy Association to the North American Meat Institute and the American Fly Fishing Trade Association, urged the White House to encourage and, if necessary, convene the parties to facilitate negotiations.
Last week, the National Retail Federation asked the PMA and ILWU to start talks as soon as possible so an agreement can be hashed out before the deadline.
Uncertainty about the outcome is already causing shippers to detour cargo from the West Coast ports, or make other arrangements, in case the ports stop functioning well, the industry representatives said.
“Previous labor disputes at ports cost the U.S. economy upwards of $1 to $2 billion per day,” said Steve Lamar, president of the American Apparel & Footwear Association. “To say the stakes are even higher today is an extreme understatement, as even a short slowdown or shutdown will disrupt already fragile supply chains and compound inflationary pressure.”
The letter noted that U.S. ports rank low in productivity comparisons to global competitors and need “targeted investment and support for infrastructure modernization and automation with workers skilled and prepared for these advanced jobs.”
The leaders also called for continued administration focus on systemic operational challenges and facilitation of data sharing across all stakeholder groups so everyone knows when containers are available to move.
“We believe these are vital elements that must be considered in any final agreement between PMA and ILWU. We agree with the administration’s assessment that our country’s ports are the gateways for getting goods to market, and we ask the Biden-Harris Administration to compel the parties to address these important issues now to ensure our supply chains are fully prepared to support continued economic growth and mitigate potential disruptions,” the trade associations said.
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