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West Coast Port Cargo Halt in Weekend to Hit US Economy

Maritime Activity Reports, Inc.

February 7, 2015

 The loading and unloading of cargo freighters is suspending at all 29 U.S. West Coast ports this weekend because of chronic slowdowns on the docks that shippers and terminal operators have blamed on the dockworkers' union, says a Reuters report.

 A statement from the Pacific Maritime Association (PMA) said that loading and unloading of vessels at ports from San Diego to Bellingham, Washington, will be suspended from Friday through Monday morning.
 
The announcement came as tensions mounted over negotiations on a new labor contract for 20,000 dockworkers, represented by the International Longshore and Warehouse Union that have dragged on for nearly nine months.
 
The announcement comes just days after PMA CEO James McKenna warned that West Coast seaports, which handle some $1 trillion in trade per year, could shut down in the next five to 10 days, possibly crippling U.S. trade with Asia. 
 
Shipping lines and terminal operators can’t justify paying overtime to unionized dockworkers who are handling cargo at reduced levels of productivity, an association spokesman, Wade Gates said.
 
PMA, which represents about 70 shipping companies, has accused dockworkers of conducting slowdowns, walk-offs and "other actions at key ports, aggravating congested conditions and disrupting cargo movement" in a bid to influence the ongoing contract negotiations.
 
PMA has been working with the dockworkers union, International Longshore & Warehouse Union, to negotiate new contracts since May. Nearly 20,000 dockworkers at 29 ports are impacted.
 
The association of shipping lines, terminal operators and stevedores made public details of its contract offer, including 3 percent annual raises over five years, retaining employer-paid health care, and raising pensions by 11 percent. 
 
Analysts and observers are cautioning about true economic impact of such a closure may come from how companies adapt to the logistics logjam. 
 
Cargo moving through West Coast ports represents an estimated 12.5% of GDP !
 
The US economy could lose $2bn a day in economic activity during a work stoppage at west coast ports, says a report in Financial Times.
 
Jonathan Gold, head of supply chain for the National Retail Federation, based the warning on a study the federation commissioned last year examining how a complete stoppage would affect US gross domestic product. The study found a five-day lockout would reduce GDP by $1.9bn daily, a 10-day lockout by $2.1bn a day and 20 days $2.5bn daily.
 
While a 10-day lockout of West Coast ports in 2002 cost the U.S. economy an estimated $1 billion a day, the same lockout today is projected to cost $2.1 billion a day, according to a June study by Jeffrey Werling, executive director of the University of Maryland’s Inforum forecasting project. 
 
A 20-day lockout would take $50 billion out of the economy, or 0.3% of the U.S.’s $17.71 trillion in GDP, at a rate of about $2.5 billion a day, according to Werling’s data.
 

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