US West Coast port dispute descending into a lock-out

US West Coast port dispute could be descending into a lock-out or an all-out strike situation

The battle between US West Coast port authorities and the International Longshore and Warehouse Union (ILWU) may be heading towards all-out strike action. Talks have broken down inharmoniously between the two with the ILWU walking away from the negotiating table saying that they may return again on 2nd December. Although it is yet to be confirmed, planned port automation is said to figure largely behind the scenes.

PMA accuses ILWU of employing slow-down tactics

The West Coast ports (including Los Angeles and Long Beach) are fronted by the PMA (The Pacific Maritime Association), who have accused the ILWU of employing slow-down tactics US West Coast Disputein order to put the pressure on. They say that the ILWU has purposely sent too few workers to deal with the amount of traffic. The ILWU refuse the accusation, but the tell-tale queue of both ships and containers seems to add substance to the PMA’s claim.

Will Christmas be the causality?

Last weekend there were as many as 12 container vessels languishing outside the ports at Long Beach and Los Angeles. The slowdown planned or not, couldn’t have come at a worse time. The pressure from distributors, stores and consumers will continue to mount in the run-up to Christmas, with fears that the supply of consumer goods won’t be sufficient enough to support the spending spree.

Trucking companies exploiting the situation

According to the Journal of Commerce, trucking companies are exploiting the situation by raising their fees, being fully aware that shippers are stuck up the proverbial creek without a paddle, and have nowhere to go. The normal spot market rate for van freight across North America is $2.02 per mile. But here in the West Coast ports van freight movements are being touted at $3.11 per mile.

Freight forwarding companies’ issue adds to the pressure

The ILWU has also turned deaf ears to the call from the PMA to agree to sign an extension to the existing contract. The ILWU are aware that by doing so they could then be legally maneuvered into arbitration. To further complicate matters, the drivers of 3 of the freight forwarding companies had a lightning strike last week. They were striking as a protest of being labeled contractors rather than full time employees. Once labeled as full employees they can become members of the unions.

The atmosphere sours

The inevitable fall-out of the extended stand-off is that the atmosphere has become sour. On one side the PMA are accusing the ILWU of forcing a slow-down of labor, and on the other side, the ILWU are accusing the PMA of influencing media coverage to their detriment.

Are we headed for an all-out strike?

Although an out-and-out strike or a lock-out is the last thing that anybody wants, it’s looking increasingly likely that it may come to that. The last time it happened was back in 2002 in a lock-out enforced by the PMA. It took then the then President, G W Bush to invoke the Taft-Hartley Act in order to get work resumed while negotiations were restarted.

The fall-out could be disastrous

In the meantime back here in 2014 the National Retail Federation (NRF) is one of many groups of businesses sending letters to President Obama to entreat him to appoint a federal mediator. In their letter the NRF point out that if it’s allowed to escalate to all out strike action, the impact on jobs in all sectors of the supply chain market, on stakeholders and end consumers would be disastrous.

The waiting game

For the time being we will just have to wait and see what happens when both side return to the negotiating table on December 2nd, 2014.

Is an all-out strike on the cards, and what can be done to stop trucking companies from exploiting the situation? Have your say on the feedback section below.

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