Late last week came the news that after a week of review, a membership caucus of International Longshore and Warehouse Union (ILWU) delegates have recommended approval of the new five year contract agreement reached with the Pacific Maritime Association in late February, representing the majority of U.S. west coast ports. This supposedly paves the way for the process of full ratification by secret ballot of all members of the labor union working at the various 29 ports. The final count is scheduled for late May, thus uncertainty still remains as to whether any local issues or disputes will stand in the way of full ratification.
Over the last weeks and months, the full impact of the U.S. west coast port disruptions as result of labor contract negotiations have come to light. Manufacturers and retailers, including Boeing, Lululemon Athletica, Restoration Hardware and even Wal-Mart have each cited the effects of shipping delays on their operating results.
As U.S. west coast ports continue efforts to dig out from cargo backlogs, underlying structural issues remain in areas of how to speed-up the unloading and re-loading of larger container mega-ships that now carry containers representing multiple shipping lines. The imbalance of available truck chassis pools and needs for higher levels of overall port automation and productivity remain as added challenges.
With the pending expansion of the Panama Canal, manufacturers and retailers continue evaluating further shipping and logistics options, and already there are reports of new warehouse and distribution investments being made at major U.S. east coast ports such as Baltimore, Miami and Savannah.
The U.S. west coast port disruption may be moving toward a new labor agreement ratification but the underlying port challenges will remain as uncertainties for many months to come.