US West Coast vessel queue worries as port labour battles heat up

The PMA an umbrella organisation of both terminals and carriers that is engaged in negotiations with the International Longshore Workers Union (ILWU). In the recent week, the battles have heated up; at stake are issues including pay for workers, as well as automation.

In the ongoing war of words, and labour “sickouts”, the PMA said: “Too much is at stake for this harmful disruption to continue.” In their statement, they also asserted that: “Union leaders are implementing many familiar disruption tactics from their job action playbook, including refusing to dispatch workers to marine terminals, slowing operations, and making unfounded health and safety claims.”

The Port of Los Angeles website showed 43 labour gangs working, and zero cut, for June 7; the previous day’s figures were 45 gangs working, and zero cut.

While the ports continue to operate, observers have expressed concern about a possible back-up of vessels, noting the steady flow of container traffic headed inbound. Traditionally, the calendar Q3 has been a time that retailers build up their inventories in advance of the busy shopping season in Q4. At present, however, there are no clusters of anchored vessels - the visible sign of port congestion during the “supply chain crunch” of 2021-2022.

Another concern that has been voiced is that cargo interests will divert their shipments to ports on the US East Coast; and the Gulf of Mexico. The PMA, in their missive, said: “The ILWU’s coast-wide work actions since June 2 are forcing retailers, manufacturers and other shippers to shift cargo away from the West Coast in favor of ports on the Atlantic and Gulf coasts. Much of the diverted cargo may never return to the West Coast.”

The shift away from Pacific ports has been a long-term trend, fuelled particularly by the opening of the widened Panama Canal in 2016, the attention to West Coast labour negotiations, which began in Spring 2022, only exacerbated a trend already underway.

One railroad was said to be taking precautions to avoid the specter of empty containers backing up. Media reports were suggesting that Union Pacific, one of six big “Class 1” railroads, was not accepting empty containers at inland depots in certain western states, for transfer back to Los Angeles. US agricultural shippers, including those in the farming regions of California, are heavily reliant on “empties” for exports to the Far East.

The unavailability of such backhaul containers spurred on the Ocean Shipping Reform Act of 2022, which was based on the bi-partisan legislation introduced in 2021, with great support from agricultural interests, as the empties were not available to farming exporters in the Midwest and in California.

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