International supply chains await outcome of US port and docker negotiations

Date Added: 27 May 2022

International supply chains await outcome of US port and docker negotiations

As the US’s largest ports in California moved record amounts of cargo amid pandemic-induced supply-chain bottlenecks, union dockworkers strengthened their indispensable role in the nation’s logistics network.

Now, with our comprehensive portfolio of ocean freight forwarding services around the globe, Davies Turner notes that the expiration of labour contracts with more than 22,000 West Coast port workers this summer could throw a wrench in the recovery plans of the twin hubs of Los Angeles and Long Beach, which handle about 42% of all US containerised trade with East Asia.

Negotiations between the International Longshore and Warehouse Union and about 70 employers represented by the Pacific Maritime Association for new contracts started May 10. Both sides have said they’re committed to keeping cargo moving throughout the process.

This would avoid a repeat of the nine-month dispute that caused delays and disruptions seven years ago and only ended after the Obama administration intervened. It took the shipping industry about the same period after a deal was reached in February 2015 to return to normal service, according to an analysis by Copenhagen-based Sea-Intelligence.

This time around, the talks are happening as supply-chain woes have pushed the southern California twin hubs to the last two positions of the World Bank and S&P Global Market Intelligence’s 370-member Container Port Performance Index released Wednesday.

Although the situation has improved, new economic gridlocks are threatening their recovery. As China eases its lockdowns and more goods leave for the US ahead of the holiday season, the domino effect of increased arrivals has yet to peak at West Coast ports, according to the leaders of the ports of Los Angeles and Long Beach.

Among the most contentious issues in this round of talks is the use of more automation aimed at improving port efficiency — advances that union members will view as major threats to their livelihoods.

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