A labor contract set to expire between West Coast port workers and shipping companies Friday is raising fears of further supply chain issues if there is a walkout, which both sides have promised won't happen.
"It wouldn't take very long for this to have ripple effects throughout the economy if there are any sort of disruptions, so we're hopeful that the parties will be able to reach a beneficial resolution in relatively short order," Jess Dankert, vice president of supply chain at the Retail Industry Leaders Association, whose top members include Target and Walgreens, told The Hill.
The International Longshore & Warehouse Union (ILWU), representing 22,000 workers at 29 West Coast ports, and the Pacific Maritime Association, (PMA), representing shippers, are negotiating a new contract.
Both sides say that port workers will continue processing cargo after the contract deadline passes. Also, the parties say that they are not likely to meet the deadline, but the workers don't plan to walk out.
"This timing is typical, and cargo operations continue beyond the expiration of the contract," ILWU and PMA said in a joint statement issued in June after their meeting with President Joe Biden.
But retailers, farmers, and manufacturers are concerned that any work stoppage could stop cargo from moving and further harm the economy, and some companies had already rerouted their shipments away from the West Coast ports out of fear of a lockout.
The Los Angeles and Long Beach ports have already faced the challenge of processing high numbers of shipping containers, and are getting ready for large demands over the next two months.
About 60% of the imports from Asia come through the West Coast ports, and U.S. exporters send billions of dollars worth of pork, cotton, and soybeans through the ports, along with manufactured products.
According to a National Association of Manufacturers (NAM) study this week, a 15-day disruption at the ports would cost the U.S. economy $7.5 billion in gross domestic products, and 41,000 people would lose their jobs, including 15,400 in retail trade and 6,100 workers in manufacturing.
"The disruption would be felt immediately," NAM President and CEO Jay Timmons said. "Manufacturing jobs will be lost if parts and supplies don't arrive. New equipment, machinery, and products can't be built when ships are backed up and there is no one available to unload and process cargo."
The West Coast port contract negotiations began in May and have focused on wages, worker safety, and automation.
The ILWU says the ocean carriers have netted record-setting profits during the pandemic, but shippers say port workers are earning average six-figure salaries.
The union is also fighting against shipping companies' automation of port systems, but shippers say the ports must boost efficiency through modernization.
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