West Coast Ports See Record Imports in Midst of Dockworker Contract Negotiations
Shippers and dockworkers continue negotiations for a new contract in the wake of technology improvements that will reduce the number of employees the docks need to operate.
The two sides—Pacific Maritime Association and the International Longshore and Warehouse Union—have been struggling to reach an agreement since the contract expired July 1, according to Bloomberg. One terminal expects to cut its workforce by up to 50 percent after its completes its technology advances in 2016.
“In the U.S., the extent to which automation of container terminals affects the number of longshoremen’s jobs depends on negotiations between the employers and unions,” Neil Davidson, a senior analyst at Drewry Maritime Research in London, told Bloomberg by e-mail. “Employers aren’t simply free to decide to reduce jobs. In addition, it depends on the nature of the automation.”
With the uncertainty surrounding the possibility of workers walking off the job without a contract in place, retailers, in turn, have begun to import merchandise early in fear of a disruption that could prevent holiday stock from reaching store shelves. While workers have remained on the job during negotiations, operational issues have led to port congestion, causing record import numbers in August (1.52 million 20-foot equivalent units) and September (an estimated 1.48 million units), according to the National Retail Federation.
“Increasing congestion at the nation’s ports as well as the ongoing West Coast labor negotiations are ongoing concerns and retailers are making one last push to make sure they’re stocked up for the holidays,” Jonathan Gold, the federation's vice president for supply chain and customs policy, said in a statement. “Retailers are working hard to make sure customers can find what they’re looking for regardless of what happens at the ports.”
Record highs are expected to continue through the new year with this month forecasted to bring in 1.53 million units, which is 6.4 percent higher than the same month last year. The upward trend over last year's import numbers is expected to continue in November (1.39 million units) and December (1.37 million units)—both more than a 3 percent increase. These estimates would bring 2014's total to 17.1 million units, a 5.3 percent increase over 2013's 16.2 million.