US companies fear a repeat of last summer’s supply-chain chaos — which left store shelves empty and fueled higher prices — as contract negotiations between the longshoreman and the operators of the nation’s largest ports remain in place.
The contract between about 22,000 dockworkers at 29 ports along the West Coast – represented by the International Longshore and Warehouse Union (ILWU) – and the Pacific Maritime Union, made up of ocean carriers and port operators, expires at the end of this month.
“The whole industry is on pins and needles,” said one manufacturer who ships goods from China to the West Coast. “This is an imminent crisis and we are hearing nothing and reading about any real progress on this and no messaging from the White House.”
According to a report in the Journal of Commerce, after several weeks of negotiations, ILWU temporarily halted talks from May 20 to June 1 without assigning any reason.
One of the hot-button issues in contract negotiation is whether to install new technology to automate certain tasks. The union is opposed, fearing more automation will kill jobs. Port operators are pushing for change to increase efficiency.
“Automation does two things: it makes companies rich and makes longshoremen unemployed,” said Harold Daggett, head of the International Longshoremen Association – which is not part of the ILWU talks.
Daggett’s fiery speech, posted on YouTube on May 13, added to concerns that ships would start to pile up again in the Pacific Ocean.
“Make no mistake about it, automation does not improve productivity. It destroys lives and livelihoods. And we will stand with ILWU to fight tooth and nail,” said Daggett, who heads the East and Gulf Coasts With represents 65,000 dock workers, the raid took place in seven minutes.
The Port of Long Beach declined to comment for this story. The executive director of the Port of Los Angeles, Jean Cerocca, did not respond for comment. Together those ports represent over 40% of container traffic in the US.
ILWU President Willie Adams declined to comment, citing an agreement with the PMA not to discuss talks with the press.
Before talks began, Serocca produced a 22-minute video with Adams in which men sitting by the water’s edge in April presented a collegial image of two power brokers who know each other well and are friendly.
“We’ll sit down and make a deal,” Adams promised on the April 13 video.
Serocca said: “As we go through these negotiations, it is the seasoned professionals who are at the negotiating table. These people know what to do.”
Industry experts said neither side has raised its hand on how the talks are progressing — and the two-week pause after Daggett’s fiery rhetoric is not reassuring.
If they do not reach an agreement within the next three weeks, the companies fear that work could stop or a slowdown could start as they did in previous talks.
Daggett’s saber-rattling is “to mobilize not only his membership but also other organizations to have a collective voice on the subject, so that they can have a wider impact,” said one logistics consultant, who did not wish to be identified, as there are issues. Political allegation.
The impasse appears to come as US companies prepare to increase shipments from China as the world’s second-largest economy eases its COVID-related lockdowns.
In May, Chinese exports grew 17% from a year earlier, more than doubled the 8% spike economists had expected, and exceeded the 4% annual pace in April, according to a Wall Street Journal report.
The ports of Long Beach and Los Angeles are ranked last in the 2021 World Bank’s Container Port Performance Index at 369 and 370, respectively.
There are only three ports along the West Coast that are partially automated, including the Long Beach Container Terminal.
In a previous contract, ILWU agreed to allow employers to install some automation at ports. But now it looks like the union may be reconsidering those concessions, despite the fact that automated terminals allow trucks to move cargo in and out of terminals more quickly, the Journal of Commerce reports.
President Biden visited the Port of Los Angeles on Friday to discuss the economy and blame greedy shipping companies for contributing to runaway inflation.
He pointed the finger at nine foreign-owned freighters that transport goods between Asia and the Americas, which increased their prices by 1,000%, resulting in profits of $190 billion last year.
Congress, the president said, would “crack” these companies.
“The Great Rift is over,” he said.
But US importers are hoping the White House will immediately intervene in labor talks to thwart another supply chain slowdown.
Meanwhile, more ships are avoiding West Coast ports in favor of the East Coast – a practice that began in 2021 when the Pacific turned to parking container ships. Supply chain analyst Larry Gross told The Post that this trend could continue as carriers place their bets on the talks.
Gross speculates that there is now an impediment to negotiations that ILWU is trying to roll back some of the concessions regarding automation that it had agreed to in previous contracts.
“I haven’t seen any real signs of progress,” Gross said. “They were going to talk every day.”
There has been a slowdown in work during nearly every other contract negotiation on the West Coast.
“I suspect we’ll see a harmonious period of thoughtful discussions once the official contract ends in three weeks,” the producer said. “That’s not going to happen. Things are going to break down fast because China now has hundreds of ships being reloaded and gone back that way with cargo in the back half of the year.”