Will US West Coast ports win ‘ILWU’ diverted traffic back?

With West Coast port labour negotiations moving inexorably to the one year mark, there is still no sign of an agreement to attract diverting shippers back and now a lunch-break dispute may persuade them to stay away.

After nearly nine months of negotiation between the International Longshore and Warehouse Union (ILWU) and the West Coast ports, represented by the Pacific Maritime Association (PMA), there is still no new labour agreement and now the PMA has accused the ILWU of disrupting operations by breaching lunch break agreements.

The PMA said the actions of the ILWU Local 13, which has allegedly stopped complying with the provision allowing employers to stagger shifts around lunch times, are causing “significant delays” in San Diego Bay.

Cargo movement by truck at the twin ports is now “completely shut down” from 12.00 pm to 1.00 pm daily, instead of normally running at about half-capacity over the meal time, which is causing a longer truck queue and delays.

The ILWU has denied the accusations, stating that dockworkers are working every day, according to their agreements with the PMA, but the disruption comes as cargo volumes dropped sharply and the threat of union unrest has spurred importers to avoid risk by diverting goods to alternative ports.

Southeast ports including Savannah, Norfolk, Charleston, Wilmington, Jacksonville, Everglades, and Miami -saw a 5.2% increase In volumes, while West Coast volumes declined by 6.1% over the same period, when compared against 2021.

Savannah was the biggest Southeast winner, with a 6.1% rise in volume, with Charleston’s shipments spiking 14.6% in shipments and Norfolk’s volumes rising just 0.2% year over year.

The initial diversion of volume from the West Coast created backlogs at many receiving ports, but as demand and volume declined over the last two quarters, most have cleared backlogs and have worked to improve efficiencies and enhancements that will attract additional volumes over the long term.

How much of this growth will continue to flow through Southeast ports, if the ILWU and PMA agree on a new contract is uncertain, but disputes like this week’s may unnerve some importers from returning.

The ILWU and PMA are keenly aware of the dangers surrounding West Coast cargo erosion to East Coast and Gulf Coast ports, issuing a joint statement last month, in which they said they were hopeful of reaching a deal soon and both want to work with West Coast ports to recover lost volumes and move forward with market growth.

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