Trade Alert: Tentative Labor Agreement Reached by PMA and ILWU

Feburary 23, 2015 – At long last, there appears to be a resolution to the West Coast labor issues that have plagued the transportation industry over the past months. The deal, confirmed in a joint statement by the two sides, was reached after the U.S. labor secretary arrived in San Francisco this week to help broker negotiations that had dragged on for nine months between the shippers and the International Longshore and Warehouse Union.

How It Affects Your Business

The port labor deal is expected to be ratified over the next two weeks. Below are some things to keep in mind:

• West Coast ports are back to running full bore
• Current backlog is expected to take 3-4 months to clear up
• Upcoming volume decreases due to Chinese New Year will provide relief
• Long-term Benefits: agreement should jumpstart increased automation, improved operational processes, and infrastructure investment
• Long-term Challenge: ports will have to learn to efficiently handle giant vessels that are coming online

How You Should Handle It

Although completion of the agreement is imminent, don’t expect to feel positive effects in the short term:

• Ports will continue to be challenged by the volume – plan accordingly
• GRI and capacity issues will continue to be the norm throughout 2015
• There have been isolated incidents with Oakland port workers walking off- be sure to keep an eye on daily status

Read more about this development on Supply Chain 24/7. We’ll continue to provide updates and support on these developments as they come.