29 West Coast Ports Partially Shut Down

from ZeroHedge.com (Feb. 5, 2015):


“Just so readers have a sense of what is at stake, this is what the average dockworker makes: $147,000 a year in salary, plus $35,000 a year in employer-paid health care and an annual pension of $80,000 (according to an association press release). It is the overtime compensation to the total shown here, which grosses to over a quarter of a million dollars, that dockworkers are negotiating to raise or else the key US supply-chains gets it.”On Wednesday [Feb. 4], talks between the Pacific Maritime Association (PMA) representing port management, and the International Longshore and Warehouse Union (ILWU) officially broke down, and without an agreement, experts have suggested that nearly 30 west coast ports could be shut down within a week. A work slowdown during contract negotiations over the past seven months has already created logistic nightmares for American exporters, manufacturers and retailers dependent on an efficient supply chain. A complete shutdown would be catastrophic, with hundreds of thousands of jobs at risk if America’s supply chain grinds to a halt.

– See more at: http://www.noodls.com/view/A53D3D09D4279EDC09F7DC8FEA35841086C872F3?7892xxx1423159855#sthash.JYsUSZyx.dpuf

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ZeroHedge explains:
“A west coast port shutdown would be an economic disaster,” said Kelly Kolb, vice president of government affairs for the Retail Industry Leaders Association. “A shutdown would not only impact the hundreds of thousands of jobs working directly in America’s transportation supply chain, but the reality is the entire economy would be impacted as exports sit on docks and imports sit in the harbor waiting for manufacturers to build products and retailers to stock shelves.

“The slowdown is already making life difficult, but a shutdown could derail the economy completely,” said Kolb. “For retailers specifically, a shutdown will have dire consequences for those dependent on spring inventory demand.”

The last prolonged port shutdown of the West Coast ports was the 10-day lockout in 2002 which was estimated to cost the U.S. economy close to $1 billion a day.

“A port shutdown of even a short duration could derail economic growth and cause long-lasting damage and job losses across the country,” said Kolb. “There needs to be a greater sense of urgency at the White House, before it’s too late.”

harbor 5_0
This is the Asian-Pacific supply line corridor.
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Ships wait in the harbor.

port long beach_0

UPDATE, Feb. 13, 2015:
What has come to my attention since posting this yesterday is what happens if, in fact, a full strike and shutdown occurs.  And what happens is based partly on previous strikes.  There was a 10-day strike in 2002 that I was unaware of.  Thanks to the post by Gary North, I found this article at globest.com.  It explains that “The last dispute was in 2002, the last time the contracts were up for negotiation. That dispute resulted in a 10-day shutdown of the ports, and cost the economy $1 billion per day. Companies are either forced to reroute to Vancouver or through the Panama Canal to the gulf ports and the Southeast ports, or wait it out and hope that the dispute ends soon. However, everyday that a ship stays out in the port and is not able to unload, it costs upwards of $50,000 per day, according to Strasmann.”  Think of the shipping costs companies incur through a detour to Vancouver first or through the Panama Canal and then into New Orleans, Mobile, Corpus Christi, and others.  Unbelievable.  Certainly the unions have the Pacific Maritime Association over a barrel.  They can ask for whatever they want; the PMA certainly doesn’t want to appear obstinate in the public’s eye or for fear that they’ll be viewed as accomplices in any economic shutdown.


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