As negotiations continue between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), importers at 29 West Coast ports, including the ports of Los Angeles and Long Beach, face uncertainty about whether or not their supply chains will be interrupted.
The two parties have been negotiating a new contract to cover nearly 20,000 dockworkers since May. The current contract expired on July 1 and was recently extended until July 11, when negotiations will resume. The parties agreed to take a three day break from negotiations, issuing a statement saying "cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached."
On July 8, the situation for importers became a bit more complicated as the Teamsters union went on strike against several trucking companies, and ILWU workers refused to cross picket lines until an arbitrator ordered them back to work. The Teamsters will continue their efforts, but are having only a minor impact on overall trucking as cargo operations continue at the busy ports.
When the ILWU and PMA negotiators meet again on July 11, they will be under pressure to settle on a new contract. In the meantime, importers should develop plans to ensure the flow of their goods and prepare for possible delays or stoppages at the West Coast ports.
Other contingency planning should include:
- Prioritizing orders
- Organizing distribution centers to secure change in inventories
- Preparing to change routes to East and Gulf coast ports and locking in rates with carriers
- Securing ground transportation
- Potentially using air freight or a combination of sea-air
U.S. Customs and Border Protection has updated its guidelines for ship and cargo contingency plans in the event of any West Coast port disruption.