Port Strike Threat Adds to Supply Chain Risk

Asian imports have been unloaded in record quantities at 30 West Coast ports for the first half of this year. Compared to the same months in 2013, 6.6% more containers arrived in May, and 7.6% in June (estimated) according to a recent report from the National Retail Federation. Much of the increase is attributed to caution on the part of shippers, who brought in their cargo ahead of schedule due to fears of a strike at the ports.

A long-term labor agreement expired June 30th for unionized West Coast port workers, but ports are still operating normally as negotiations continue on the new contract. The mere threat of a strike made shippers jittery, however, as a prolonged work stoppage would delay time-critical cargo and could cost economic damage of as much as $2 billion per day.

Last week, about 120 drivers for three drayage companies walked out at the Ports of Los Angeles and Long Beach, to protest labor conditions. Port operations continue, however, as they have during other targeted actions that have affected individual ports in recent years, only for a day or two at a time. The worst disruption to West Coast port operations resulted from a 10-day lockout in October 2002, which was ended by a Federal court order.

Peggy Dorf

Peggy joined DAT in 2008 as a writer and market analyst. She was instrumental in developing DAT Trendlines, and she writes extensively about the impact of economic trends on companies and individuals in transportation and logistics. Peggy is a Certified Transportation Broker with decades of experience in technology marketing and an MBA from the Wharton School.