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Just when it appeared that there could be some light at the end of the tunnel for the supply chain, trade unions working at California’s import terminals could put a spike in the works. Labor negotiations with unions at the docks in California are not going well, and a strike could plunge the supply chain into chaos. Paul Berger reports for The Wall Street Journal:
Long-stalled West Coast port labor talks are showing no signs of progress, according to people familiar with the negotiations, extending uncertainty for U.S. retailers who rely on the coast to import goods from Asia.
Shipping industry and Biden administration officials had hoped the talks, which began in May, would conclude last fall. But, people familiar with the negotiations say the parties haven’t made progress since the summer on regional issues that are delaying discussion of major contract provisions, including wages and automation.
One person familiar with the talks said there was a growing sense of frustration in the maritime industry. ”Everyone would like to see this conclude so there’s no more uncertainty in the market and we can move on,” the person said.
The talks cover more than 22,000 dockworkers at 29 ports stretching from California to Washington state. Dockworkers have been working without a contract since the last multiyear agreement expired July 1, 2022, and the sides couldn’t agree on an extension.
Some importers have been diverting furniture, clothes and electronics to East Coast and Gulf Coast ports in case the labor talks break down and lead to work disruptions or a strike.
The talks now look set to last longer than acrimonious negotiations that ran from May 2014 until February 2015 that were marked by delays in cargo handling that cost some retailers millions of dollars in lost sales.
“The uncertainty regarding the contract has everybody on edge,” said Jonathan Gold, vice president for supply chain at the National Retail Federation.
Mr. Gold said retailers usually start setting plans in the first quarter for importing goods during the summer and fall peak shipping season. He said many retailers will likely plan to continue diverting goods to Gulf Coast and East Coast ports until they can be sure an agreement can be reached.
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