The Pacific Maritime Association and their International Longshoremen and Warehouse Union (ILWU) employees begin contract negotiations on May 12, 2014. The existing agreement expires on July 1. The ILWU represents dockworkers at ports along the West Coast. As in previous contract years, insiders speculate the bargaining process could be contentious. The critical issues on the table include stronger safety provisions, wages, benefits, ILWU jurisdiction, new technology and future health care expenses attributed to the Affordable Health Care Act. Past negotiations have led to work slowdowns and stoppages, such as a 2002 ten-day lockout that required presidential intervention.
Shippers should begin considering the impact of West Coast port disruptions to their supply chain. By planning in advance, importers have a greater chance of finding alternate shipping routes, services or strategies. Companies may choose to find back-up suppliers closer to their distribution points or may build onshore inventory supplies beforehand. In the event of a strike, companies scramble to find alternative transportation, which results in capacity issues. Airfreight bookings or contingency routings may help alleviate the crunch if booked prior to any negotiation misfires or labor unrest.
By prioritizing critical supplies and planning ahead, companies have greater opportunity to minimize disruption to their supply chain in the event of West Coast labor conflicts. Deringer will provide updates on the negotiations when they begin. In the interim, Deringer’s logistics staff can help you plan accordingly by booking freight for early delivery or providing information about our distribution services if stocking additional product is a good solution.