West Coast Port Disruptions

Formal contract negotiations between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) begin on May 12, 2022. The ILWU represents port workers in California, Oregon and Washington. The PMA represents carriers and terminal operators at West Coast ports. The current ILWU contract is set to expire on June 30, 2022.

Shippers have been concerned for months that stalled negotiations could foster disruptions to an already strained US supply chain. Some large shippers are not waiting around for the outcome of the negotiations. They have already made the decision to bypass West Coast ports by rerouting a percentage of their containers to U.S. East Coast ports.

Although talks between the two sides do not start until May 12, 2022, statements released by the ILWU president regarding the upcoming negotiations have been optimistic. This is a good sign for shippers desperate for any positive news surrounding the new contract. Work slowdowns and disruptions have been a staple during past contract negotiations. Both sides seem to recognize past tactics such as slowdowns or lockouts would have serious consequences for all stakeholders involved.

Everyone involved in shipping, including the White House, will be closely monitoring the negotiations. At the beginning of the year, industry experts were predicting a 50/50 chance that a contract would be concluded with no disruptions. Four months later, there is much greater confidence that a contract will be concluded with no disruptions. This is finally some good news for an industry that has been burdened with bad news for the last two years.

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