Pickle at the Port – Labor Contract Expiration

Jul 5, 2022

Shipping getting sticky: Trouble is a-brewin’ from Long Beach to Seattle. But it’s not an earthquake or a tsunami—it’s labor negotiations at the ports.

The International Longshore and Warehouse Union (ILWU) represents over 22K workers. Their current labor contracts, which have been under negotiation for months, faced expiration on July 1.

Steeee-rike? The passing of the July 1 deadline also means the expiration of the “no-strike clause,” opening the possibility of a work stoppage at the ports, though industry groups say otherwise.

“While there will be no contract extension, cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached,” the Pacific Maritime Association (PMA) employer group and the ILWU said in a joint statement.

Eastbound and down: From Southern California to Washington state, interruptions in imports and exports along the West Coast could have a devastating effect on agriculture. Shipments have already been heavily diverted to eastern and southern ports—such as Houston, Savannah, and New York and New Jersey—causing massive delays and sending costs skyward.

According to the Long Beach Post, the spot rate for a 40-foot container a few years ago was less than $2K. Last year, it surpassed $20K and has recently been hovering around $14K.

Where this goes: Active negotiations continue with participation from the Department of Labor and the White House.