Monday, 23 February 2015

West Coast U.S. Port Delays Partially Solved

West Port Delay Problem Partially Solved Following Union Contract Negotiations

The International Longshore and Warehouse Union, after nine months of negotiations with the Pacific Maritime Association, created a 5-year contract pending approval of its members. This means that the ports may begin fully-operating again. However, simply hiring more workers may not be enough to solve the container congestion problem at the port. Typically, it can take over one month for apparel and textile companies to get merchandise out of the ports. However; port officials are saying it will be at least two months before operations return to normal following the labor disputes. The executive director of the Los Angeles port, Gene Seroka, believes three months to be a more realistic figure for their port. A total of 29 ports have been affected by contract negotiations. Additionally, a vast number of businesses have been affected by the unexpected long delay in logistics. The total cost associated with the delay is unknown, though lost sales for food-related items are estimated to have totaled over $1.6 billion for the month of December 2014 alone.

Ironically, this labor dispute comes right before the Panama Canal is scheduled to be widened to allow boats three times the current size allowed to pass through its space, potentially affecting shipping patterns and impacting West Coast ports negatively. Widening the Panama canal would also cut transit time and approximately double the number of ships able to pass through each day.