Breaking: West Coast Port News
Audit Logistics has been monitoring this story since the news broke on Friday, June 2nd. We now feel like we have enough information to share about what is going on in some of the West Coast ports.
The news broke on Friday, June 2nd with reports of "[t]he Port of Oakland was shut down Friday morning due to insufficient labor for terminal operations... the actions taken by workers are not a formal strike, the source told CNBC to expect stoppages at other West Coast ports as union workers refuse to report for assignments."
It is our understanding that ports are not shut down, but rather specific terminals were disrupted beginning on Friday's walkout.
The International Longshoremen's and Warehousemen's Union (ILWU) Local 13 Chapter released a statement on Friday, stating that "the rank-and-file membership of the Southern California ILWU has taken it upon themselves to voice their displeasure with the ocean carriers’ and terminal operator’s position. However, cargo operations in the ports continue as longshore workers remain on the job to move the nation's cargo..." The IWLU represents over 20,000 workers across 29 West Coast Ports.
This situation has many layers, and here are a few of the factors at play:
Per Audit's monthly port report, we have been aware for the last 13 months that the ILWU did not come to an agreement with the Pacific Maritime Association (PMA), who represent the west coast terminal operations. The ILWU contract expired July 1, 2022. Both sides are still working to negotiate a new contract.
The Loadstar reports that ILWU International President Willie Adams was adamant that contract negotiations had not broken down. "Negotiations have, reportedly, made some headway in the past couple of months."
While a few sources are worried about parallels to the 2014-2015 labor fallout, FreightWaves points out that " the U.S. supply chain has very recent and in-depth experience dealing with vastly greater congestion than occurred when labor disruptions backed up traffic in 2015. According to data from the Marine Exchange of Southern California, the prior labor contract disruption caused a maximum of 27 ships to wait off Los Angeles/Long Beach amid a backup lasting three months. In the COVID era, the Los Angeles/Long Beach backup peaked at 109 ships and spanned two years."
Some Hawaiian Residents have already started stocking up in preparation for long-term shut downs, despite officials stating there is no need to panic.
As of June 5th, here are the terminals that are experiencing disruptions:
TTI Terminal at Long Beach Port, which reported on Monday, June 5th "Gate update: Monday 06/05/23 1st Shift Gate Cancelled. All appointments will be cancelled."
All other terminals, including those at Los Angeles and Long Beach ports that reported labor shortage issues resulting in disruptions on Friday, are reporting as open. Audit Logistics has reviewed the anticipated impact and we see, at this time, minimal impacts to container shipments coming in and out of West Coast Ports.
We will continue to monitor the situation, and please reach out to our team if you have any specific questions.