Labor issues at ports that are located in cities on the West Coast have U.S. retailers worried about the economic impact of a potential shutdown.
The current contract between the union that represents West Coast port workers, the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) was supposed to expire in July, but negotiators have thus far been unable to agree to more than temporary extensions.
The National Retail Federation and National Association of Manufacturers said in a study conducted earlier this year that a shutdown of ports in cities like Los Angeles, San Francisco, Portland and Seattle would cost the U.S. economy almost $2 billion per day.
“The last prolonged port shutdown of the West Coast ports was the 10-day lockout in 2002 which some estimate cost the U.S. economy close to $1 billion a day and took months to recover from,” the groups said.
“The NRF-NAM study estimates that a five-day stoppage would reduce GDP by $1.9 billion a day,” the statement on the study continued. “This would increase exponentially with a 20-day stoppage resulting in a loss of $2.5 billion a day."
The labor strife at the West Coast ports has also drawn the attention of lawmakers.
House Transportation and Infrastructure Committee Chairman Bill ShusterWilliam (Bill) Franklin ShusterLobbying firm cuts ties to Trent Lott amid national anti-racism protests Ex-Rep. Frelinghuysen joins law and lobby firm Ex-Rep. Duffy to join lobbying firm BGR MORE (R-Pa.) wrote a letter to President Obama last week calling for potential mediation between the dockworkers and the ports that employ them.
“Labor contract negotiations between these two entities began in the spring, and the master contract covering nearly 20,000 dock workers at the 29 container ports on the West Coast expired on July 1, 2014,” Shuster wrote. “Since that point, the ongoing negotiations have deteriorated in recent weeks and alleged slowdowns and crisis level congestion have occurred up and down the West Coast.”
The PMA, which represents port managers in labor negotiations, has blamed delays in approving a new contract on the dockworkers’ union.
“The International Longshore & Warehouse Union has initiated orchestrated slowdowns at the Pacific Northwest ports of Seattle and Tacoma, severely impacting many of the largest terminals during the peak holiday shipping season,” the port managers’ group said in a statement in November.
“The PMA has found that the slowdowns at these Pacific Northwest ports have resulted in terminal productivity being reduced by an average of 40 to 60 percent. For example, terminals that typically move 25-35 containers per hour were moving only 10-18, according to statistics compiled by PMA, which tracks historical productivity based on the number of containers moved per hour for each vessel at the same terminal,” the port owners' statement continued.
The dockworkers’ union has countered that the port managers are falsely blaming them for issues that are not related to the labor discussions.
“The numerous, non-labor related causes of the congestion problem up and down the West Coast are well documented,” ILWU spokesperson Craig Merrilees said in a statement. “During negotiations last week, the Union addressed PMA directly to express concerns about its deceitful media tactics and the corrosive impact of such tactics on collective bargaining. It’s particularly inflammatory for workers to be told that they’re using safety as a gimmick.”
Shuster said in his letter that the Obama administration may have to step in to help resolve the labor standoff before the West Coast ports are shut down during the holiday season.
“It was my hope that the ILWU and the PMA would conclude their negotiations in a timely and fair manner and without disrupting the flow of commerce and harming the nation's economy,” he wrote. “Unfortunately, this has yet to occur. I appreciate your attention to this critical matter.”