US West Coast ports shutdown may be near

WASHINGTON (ICIS)–The 29 major US West Coast ports may be close to a shutdown as nine-month-long contract negotiations between port operators and longshoremen have neared a crisis point, officials said on Thursday.

The Pacific Maritime Association (PMA), representing port owners and operators, has been in prolonged contract negotiations with the International Longshore and Warehouse Union (ILWU) since May 2014 for a new contract but without apparent progress.

The PMA said that it has made an “all-in” final contract offer “designed to bring contract negotiations to a close after nearly nine months”.

PMA president James McKenna again accused the ILWU of organising a work slowdown at the ports, causing backups of shipping containers at the ports and long lines of incoming cargo vessels waiting offshore to be unloaded.

But the ILWU in turn accuses port owners and operators for the slowdown, alleging “a massive, employer-caused congestion crisis that has delayed shipping for most of 2014”.

McKenna told reporters that port shutdowns may be inevitable because the mounting backlog of containers and cargoes means that operations at the ports are becoming cost prohibitive, and that owners may decide on a shutdown rather than continuing to pay for work that is not getting done.

He said that a ports shutdown could be imminent but that a shutdown date would largely be determined by the ports’ operating systems.

ILWU spokesman Craig Merrilees said the longshoremen “have no interest in a ports shutdown, and we remain focused on the negotiations”, which were to resume Thursday morning.

A ports shutdown, said Merrilees “is up to the employers, but it would be reckless and irresponsible because an agreement is close and everyone needs to stay focused and get the job done”.

The PMA charged that union negotiators had made significant new demands that have set back the negotiations.

A contract-related work stoppage involving the 29 ports in 2002 delayed chemicals and resins shipments not only on the West Coast but throughout the US west because of the knock-on impact on related freight rail traffic in the region.

That 10-day shutdown triggered business losses estimated at $1bn daily.

Even after the 2002 ports shutdown ended, the backlog of export and import shipping and internal US freight took weeks to resolve.

Late last year chemicals sector officials joined 100 other industry groups in urging the White House to intercede in the negotiations, warning that the costs of a new ports shutdown would be nearly $2bn/day.

Federal mediators are taking part in the talks.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy