Secretary Of Labor Hopes To End West Coast Ports Gridlock

Image courtesy of Corey Templeton

Today, workers at the major sea ports on the West Coast report back after a split four-day weekend. Contract negotiations between the union and a trade organization that represents shipping companies have continued for nine months, and the U.S. Secretary of Labor is joining the negotiations today before the slowdown has worse effects on the global economy.

The two sides don’t even agree on the reason for the slowdown: either it’s a deliberate tactic on the part of port workers, or changes in the system have caused difficulties in unloading all the cargo. Everyone agrees that there are ships waiting at the 29 ports along the Pacific coast, and they aren’t being unloaded during normal workdays.

Containers on a ship waiting to unload in Long Beach can affect people nationwide: everyone from retailers to factories depend on the smooth flow of cargo containers around the world. While some automakers have started to transport parts by air cargo, Honda says that it will start to slow down production at its factories in the United States and Canada.

“We are entering another period of fundamental supply chain re-evaluation that is already leading some shippers to permanently abandon the West Coast,” one expert on international trade by sea told Reuters. That information is helpful to shipping lines, since the threat that work at the ports could dry up entirely is a useful negotiating tool. Shipping rates are going up in general because of the dispute, and when the companies shipping merchandise across the Pacific need to reroute those ships to ports on the Atlantic coast, that’s more expensive and inefficient.

The Secretary of Labor, Tom Perez, hopes to help the two sides negotiate and come to an agreement so the stuff can continue flowing.

Asian supply lines hit by West Coast ports dispute [Reuters]