Contentious labor negotiations that have been going on since May are behind a drastic decrease in imports for Southern California ports, according to The Wall Street Journal (subscription).
The dispute: “The talks cover more than 22,000 workers at 29 ports from Washington state to California and involve about 70 employers who run cargo-handling operations.”
- “The talks have been held up in recent months because of a dispute between the International Longshore and Warehouse Union, which represents dockworkers, and another union over which workers perform certain jobs at a single terminal at the Port of Seattle.”
The impact: Labor negotiations between the port-worker unions and their employers intensified in recent months, leading to cargo slowdowns. Meanwhile, importers fed up with the disruptions have circumvented West Coast ports, even pulling out end-of-year goods in some situations.
- Imports are down 26% at Los Angeles and Long Beach ports as a result, as cargo importers switch to the East Coast and the Gulf Coast as alternatives for transferring goods.
The outlook: As the talks appear to have stalled out, industry officials anticipate that the situation is likely to continue until at least early 2023—and possibly for a while longer.
Why it matters: The U.S. typically relies on the Southern California ports for supply lines that run to and from Asia. Increased demand during the pandemic caused significant congestion, and the current delay in negotiations is putting additional strain on the ports’ operations.