PMA and ILWU Reach West Coast Port Agreement
February 23, 2015
Just as the media seemed poised to run headlines decrying the complete shutdown of operations at West Coast ports, the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) announced this past Friday evening that a tentative agreement had been reached.
“After more than nine months of negotiations, we are pleased to have reached an agreement that is good for workers for the industry,” said PMA president James McKenna and ILWU president Bob McEllrath in a joint statement. “We are also pleased that our ports can now resume full operations.”
The months-long labor dispute at 29 West Coast ports created a massive backlog of cargo that has disrupted the flow of freight across the entire country. The congestion had forced container ships to anchor at bay for weeks at a time before being unloaded and had also caused critical slowdowns in intermodal and truck transportation services. Delivery times had moved from an average of 20 to 30 days to as much as 90 days since the beginning of the crisis last July.
In recent weeks, growing concern that the crisis could have deteriorated into a full-blown strike or shutdown led the Obama administration to send U.S. Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh to intervene in the negotiations.
“2014 was the best year since the late 90s in terms of job growth and we see a real hop in the step of this economy,” Perez told CNN. “I think in the grand scheme, I’m confident that we can recover quickly.”
Now that West Coast employees are back to work as normal, the Port of Oakland and the National Retail Federation predict that it could still take up to eight weeks to catch up on the remaining backlog of cargo that is sitting on vessels, docks and in warehouses along the coast.
Even with this major hurdle cleared in the dispute, it will take time for all operations to get back on track. Compounded by a shortage of chassis to move containers from the ports and an ongoing driver shortage within the transportation industry, a true sense of relief will be staggered.
For our current international customers, Averitt is making their needs a priority before taking on new business that may need our involvement. Since many of the functions necessary to facilitate the movement of international products are outsourced, costs may be higher for a period of time until the situation stabilizes. However, we are working diligently to keep prices contained to the extent that is feasible.
We will continue to monitor the West Coast port situation and will advise customers accordingly.