Counselor

West Coast Dock Standoff Ends

Negotiators for dockworkers and shipping companies have agreed to a tentative deal, ending a nine-month dispute that clogged cargo traffic at 29 West Coast ports, officials have announced. The deal, struck in late February, was engineered in San Francisco by a federal mediator and U.S. Labor Secretary Tom Perez.

“We are pleased to have reached an agreement that is good for workers and for the industry,” said Pacific Maritime Association (PMA) President James McKenna and International Longshore and Warehouse Union (ILWU) President Bob McEllrath, in a joint statement. “We are also pleased that our ports can now resume full operations.”

The new five-year deal affects 29 ports from San Diego to Seattle that handle roughly 25% of all U.S. international trade. With an agreement reached, President Obama has urged shippers and dockworkers to efficiently untangle backlogs, so cargo can now get to where it’s needed faster. The dispute between the PMA and ILWU had become contentious since the fall, leading to slowdowns by workers and temporary lockouts by shippers. Legislators, manufacturers and trade groups had called on negotiators to agree to a deal before the situation grew worse. The focus now has shifted to how to prevent similar protracted conflicts in the future, so that the economy doesn’t get negatively impacted.

“We must dedicate ourselves to finding a new way to ensure that this nightmare scenario is not repeated again,” said the National Retail Federation, in a statement. “If we are to truly have modern international trade, supply chain and transportation systems, we must develop a better process for contract negotiations moving forward.”

Companies in many industries, including ad specialty firms, were impacted by the congested ports. In February, several Top 40 suppliers told Counselor that delays had strained inventory levels and even caused customer cancellations. While a deal being reached is a positive step, officials say it will still take weeks for some cargo to be unloaded.

While promotional product suppliers welcome avoiding a work stoppage, the importing slowdown that occurred through the latter part of 2014 and into the beginning of this year has already disrupted their supply chains. ETS Express (asi/51197), for example, had shipments in port in the first quarter but was unable to access them.

“The slowdown has hindered our ability to bring in critical merchandise to replenish our inventory levels or receive specific product needed to meet key event dates for our customers and their clients,” said Brandon Bell, vice president of sales at ETS Express, just before the agreement had been struck. “It has become increasingly more difficult to forecast our inventory needs for the future or when specific items will arrive at our facility.”

Other suppliers were in similar situations. “The West Coast ports situation has been impacting our daily business seriously,” said Sharon Luo, products manager at Ariel Premium Supply (asi/36730). “Containers are delayed – some of them for up to almost three weeks. Because of that, we have had customers cancel their orders with us, while others have had to reschedule their event dates.”

Elsewhere, iClick’s (asi/62124) USB business has been largely unaffected because it air-ships these tech items, but other sea-shipped products the Seattle-based supplier offers were tied up in the port logjam during the first quarter.

“We have a lot of product that was sitting on ships in the harbor, but has not been unloaded,” said Jeff Hall, president of iClick. “Some have been there for weeks.” – DV and CR