Logistics News

West Coast port labor talks, covering more than 22,000 workers at 29 ports from California to Washington state and include major hubs for trade with Asia, are stalled. Port of Los Angeles Executive Director Gene Seroka said that in August 40,000 containers, measured in 20-foot equivalent units, were diverted to the neighboring ports because of the dispute. Port congestion has forced ships to wait at anchor for weeks and a labor shortage makes loading and unloading ships slower.

Amidst the stoppage, container-ship companies are racing to buying airplanes and seeking aviation parts as customers opt out for more reliable shipping. Shippers that have long shunned airfreight are now racing each other to get into the market.

Maritime executives had hoped the talks would conclude in the early fall. Now, they worry the negotiations could continue through the end of 2022 or into 2023, extending uncertainty that has triggered shifts in trade flows and complicated planning in supply chains.

The concerns over the progress of the port negotiations comes as labor disputes around the U.S. are growing.  The threat of a U.S freight railroad strike still looms, even though the Biden administration intervened to narrowly avert a nationwide shutdown of the freight rail system. The contract, yet to be ratified by Union leaders, would provide rail workers with a 24% wage increase during the five-year period from 2020 through 2024.

Sources: WSJ Link 1 | WSJ Link 2 |Fox Business Link