A potential strike by West Coast dockworkers would bring more supply-chain trouble.
I have a new piece up today on how the deal to avert a rail strike that President Biden and Secretary of Labor Walsh celebrated last month is breaking down.
Unfortunately for U.S. transportation systems and the economy at large, that’s not the only potential strike on the horizon.
The labor contract for West Coast dockworkers represented by the International Longshore and Warehouse Union (ILWU) expired on July 1. Since then, they’ve been legally permitted to strike whenever they want. They haven’t, and the two sides have been engaged in negotiations for months.
Those negotiations are largely hidden from public view, but the details we do have indicate that they aren’t going smoothly. Workers were accused of using slowdown tactics to increase pressure on employers, but it’s not clear whether productivity actually declined.
Talks were reportedly suspended over a jurisdictional dispute at the Seattle port earlier this week. The ILWU represents all unionized dockworkers on the entire West Coast, so one port’s problems can turn into an issue up and down the coast.
Shippers have been routing freight to other ports for months, partly to avoid entanglement in a potential work stoppage. The West Coast’s share of ocean imports is at a 40-year low.
Much of the reduced congestion at Los Angeles/Long Beach is the result of shippers moving elsewhere, not any actual improvement in the port’s processing capability. Greg Miller reports for FreightWaves:
September is usually a strong month for West Coast imports as U.S. companies bring in their year-end holiday goods. Not so in 2022.
On Wednesday, the Port of Los Angeles reported its lowest import total for September since 2009, amid the Great Recession. The day before, the neighboring Port of Long Beach posted its weakest import total for September since 2016.
Imports to Southern California ports are falling fast because shippers have shifted volumes to East and Gulf coast ports, fearing disruptions from West Coast port labor negotiations. Simultaneously, volumes are now pulling back nationwide due to falling demand.
Dockworkers in Germany and the U.K. have already gone on strike this year, in both cases for the first time in decades. Dockworkers in South Africa went on strike for twelve days earlier this month. Unions have had the upper hand, given global economic conditions, and they have no qualms making supply-chain problems worse.