Ag watches West Coast port labor situation as Labor Secretary steps in

Ag watches West Coast port labor situation as Labor Secretary steps in

White House sends U.S. Secretary of Labor Tom Perez to California to end union-employer contract impasse, return ports to normal productivity

With U.S. Secretary of Labor Tom Perez dispatched to California to handle a contract dispute that has been plaguing 29 West Coast ports, meat exporters say the move is necessary to sustain export business with Asian nations.

The contract dispute, between International Longshore and Warehouse Union workers and Pacific Maritime Association shippers, has been ongoing since late last spring. The workers have been working without contracts since theirs expired in July.

Container ships sit docked in a berth at the Port of Oakland on Feb. 11, 2015, in Oakland, Calif. (Photo by Justin Sullivan/Getty Images)

Discussions worsened in November and since then productivity slowdowns have kept some export shipments of meat, produce and other goods in waiting. Chilled meat exporters are especially concerned because the product's short shelf life puts it at a greater risk if not shipped according to a strict timeline, the U.S. Meat Export Federation said.

USMEF adds that Asian customers are "increasingly reluctant" to place orders for chilled product due to shipping concerns.

During the course of talks, PMA and ILWU each have blamed shipping slowdowns on the other, with PMA asserting that port workers are slowing to gain leverage in discussions and ILWU claiming PMA has limited workers' schedules, leading to restrictions on the amount of space available for returning empty containers.

Most recently, PMA shut down vessel operations at ports over four days last week due to both slowdowns and the expense of holiday pay. Though Perez has arrived on the West Coast to monitor talks, a spokesperson told Reuters Tuesday that there were no updates on the negotiation status.

Leann Saunders, USMEF chairwoman, said the issue has reached "crisis" stage for exporters.

"If you think about all the product that we're exporting that goes out of the West Coast and those specific ports you've got 80% of your waterborne product. That equates to about $150 million per week," she said of meat exports.

Retailers are specifically concerned that not only will money be lost due to the impasse, but also market share.

Related: 5 things to know about the West Coast port labor situation

"Historically it's taken us years to build up that business we have in those Asian markets and if we don't get that port opened up quickly, all of that could be in jeopardy," she said.

According to a report from the Kurt Salmon research and consulting firm released last week, West Coast port congestion issues could cost retailers as much as $7 billion this year. An extended 10-day shutdown could cost as much as $2.1 billion per day to the overall economy, the report said.

Strategist for the firm Frank Layo told Bloomberg last week that the effects of West Coast port delays may start to appear on company earnings reports as soon as March and April.

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