5 things to know about the West Coast port labor situation

5 things to know about the West Coast port labor situation

West Coast labor issues are costing all retailers billions, study finds

Update, Feb. 20, 2015: Shippers and portworkers reach a tentative five-year labor agreement.

West Coast portworkers and shippers have been engaged in a labor dispute since July, leading to perhaps billions lost in trade revenue and expired product, according to some estimates.

Ports play a key role in getting products to export destinations. According to Reuters, the 29 affected ports handle nearly half of all U.S. maritime trade.

The dispute – between the International Longshore and Warehouse Union (which represents workers) and the Pacific Maritime Association (which represents employers/shippers) – has led to slowdowns.

Trucks leave a berth at the Port of Oakland on Feb. 6, 2015, in Oakland, Calif. (Photo by Justin Sullivan/Getty Images)

Each side blames the slowdowns on the other – PMA says that ILWU has been withholding qualified crane operators to slow the movement of containers at port, while ILWU claims that recent moves by PMA to eliminate night shifts due to lack of space for returning empty and export containers is the top reason, among other changes, for crippled ports.

Despite the appointment of a federal mediator in early January and the dispatch of U.S. Labor Secretary Tom Perez to further facilitate agreement, talks continue.

West Coast ports also have temporarily suspended vessel movements on two occasions this month, affecting six days of operations collectively.

Here are few more details you need to know about the West Coast port labor situation:

1. Vessel operations closed temporarily over the weekend. PMA negotiators shut down vessel operations at West Coast ports Feb. 7-8, Feedstuffs reported, due to ongoing talks. Regarding the closure, PMA spokesman Wade Gates said: "After three months of union slowdowns, it makes no sense to pay extra for less work." Vessel operations were again suspended on Feb. 12, 14, 15, and 16 citing a mix of holiday pay issues and slowdowns.

2. Importing countries aren't happy; U.S. fears market loss. Japanese auto companies are resorting to air-lifted parts; U.S. retailers fear importers will find alternate product sources.

3. Slowdowns have cost ag millions. In late January, ag groups appealed to ILWU and PMA for a quick conclusion on contract talks. According to the National Pork Producers Council, one estimate has the U.S. meat and poultry industries losing more than $30 million a week due to the bottleneck.

4. Over all industries, the cost could be in the billions. Congestion at West Coast ports could cost retailers as much as $7 billion this year, according to a study reported by the Puget Sound Business Journal. If the ports shut down entirely for 10 days, the study said, it could cost the country $2.1 billion per day, and the total two-year impact could be as much as $37 billion.

5. White House acts. The White House said on Feb. 14 it would send Labor Secretary Tom Perez to California to monitor talks on the deal after pressure from U.S. retailers and trade groups, Reuters reported.

Bonus update: Shippers and workers agreed to a new five-year contract on Feb. 20; that agreement is subject to ratification by both parties, a statement said.

This story originally appeared Feb. 10, 2015. Information was updated Feb. 21, 2015.

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