According to multiple media outlets, formal contract negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) have resumed for the first time since November 20. Experts posit that, if substantial progress is made between December 3 and December 15, when the ILWU caucus will convene in San Francisco, ILWU leadership could seek authorization to sign a tentative agreement. That tentative agreement would then need to be approved through voting at local ports in following weeks.
If sufficient progress is not made during the current round of talks, negotiations would almost definitely extend into 2015 – a prospect that could prove extremely costly to carriers, terminal operators, and importers and exporters relying on the West Coast gateways. Trade organizations have accused the ILWU of lacking “a sense of urgency” in reaching a contract settlement, since current port congestion means more overtime pay for longshore workers. Meanwhile, shipping lines claim to be incurring millions of dollars in losses due to berthing delays and disrupted sailing schedules.
As Transpacific traffic enters its typical slack period, West Coast ports continue to work through their current backlog of containers. Cargo volumes are expected to ramp up again in advance of Chinese New Year (February 19), when Asia-based manufacturers typically halt operations for one to two weeks.
Contract negotiations between the ILWU and PMA began in May 2014, and dockworkers have been operating without a contract since July 1. According to the PMA, ILWU members began engaging in slowdowns towards the end of October, contributing to the current level of port congestions. The ILWU rejects this accusation, blaming the congestion on the carriers’ decision to exit the chassis business and the ever-escalating size of vessels.
SPARX logistics will continue to monitor this situation and keep our customer apprised of the latest developments. If you have questions or concerns related to specific shipments, please feel free to contact your SPARX representative.