Cargo Spikes Amid Shutdown Worries

Promo Items Pass Through Several West Coast Ports

CargoThe ports of Los Angeles and Long Beach reported a significant surge in cargo flow last month, mostly fueled by retailers’ fears of a potential work stoppage. In Los Angeles, cargo volumes were up 13.9% in June, year-over-year, to 736,438 container units, while Long Beach saw an 8% rise, with 610,516 units. Overall, about 40% of U.S. imports, including some promotional items, pass through several West coast ports. The sites have been seeing traffic increases over the last few months in anticipation of the much-publicized labor contract affecting dockworkers expiring.

Nearly 20,000 dockworkers at 29 West coast ports have been working without a new deal since July 1. Experts say retailers have been rushing goods into the country, not wanting to risk being out of stock during the busy back-to-school and holiday seasons.

The International Longshore and Warehouse Union (ILWU), which represents dockworkers, and the Pacific Maritime Association (PMA), which represents port operators, have been negotiating a new contract since May. Among the issues under review are wages, jurisdictional claims and health care costs. The two sides temporarily stalled talks earlier this week, agreeing to resume talks yesterday, to allow the ILWU to gather for the previously scheduled Longshore Division Caucus in San Francisco.

In a joint press release, the sides also announced that they would not be meeting from July 28 to August 1, during which time the ILWU will be engaged in negotiations in the Pacific Northwest unrelated to the main contract talks. Both sides have stressed their commitment to getting a contract signed without a business disruption. “While there is not contract extension in place, both parties have pledged to keep cargo moving,” according to the joint release.

Even a short port strike could have far-reaching consequences for the U.S. economy, analysts say. Reports from trade groups show that a 10-day work stoppage would cost the country $21 billion and 169,000 jobs.