Port congestion that has snarled supply chains for more than a year could soon get worse if negotiations for a new contract between West Coast port operators and dockworkers don’t go smoothly. The rocky history between management and the stevedoring union has shippers buckling in for a stomach-churning year of late shipments, stockouts and soaring transportation costs.
On Thursday, the National Retail Federation urged the Pacific Maritime Association and the International Longshore and Warehouse Union to begin talks immediately on replacing the current contract, which expires June 30, to avoid worsening backlogs from rampant consumer demand colliding with COVID-related labor, equipment and facility shortages.
The trade association warned that a delay in contract negotiations would harm companies and consumers that rely on the West Coast ports and force shippers to consider other gateways, especially with the contract deadline falling before the peak shipping season begins for holiday merchandise.
Automation and compensation are considered the main sticking points. The ILWU has a reputation for hard bargaining and enters the talks in a strong position. The union is expected to leverage the congestion to pressure container lines and their terminal partners, while insisting its highly compensated members are due a cut of carriers’ record profits, which Drewry now estimates at $190 billion in 2021.
“Both parties should attempt to reach a contract well before expiration for...
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