The 2020 Mid-Year Economic Update_long

Port Dispute Finally Resolved

Sides reach tentative labor agreement, but delays likely for a while.

Shipping companies and the union representing longshoremen at 29 West Coast ports have reached a tentative five-year labor agreement. Terms of the deal were not released. The agreement will end months of disruptions for U.S. commerce, though a sizeable backlog could continue delaying shipments for a couple of months.

The sides worked without a labor contract since last summer, and beginning in October the offloading of cargo from inbound container ships slowed dramatically. Shippers blamed the union workers for deliberately stalling operations, and union leaders blamed increased maritime traffic for the delays.

After the sides reached an agreement late last week, with help from U.S. Labor Secretary Thomas Perez and a federal mediator, the ports resumed full operations Feb. 21 and should be back to normal in six to eight weeks. The months-long disruption meant thousands of cargo containers sat idle at the facilities or on freighters arriving from Asia that were unable to dock for days or even weeks. A full port shutdown could have cost the U.S. economy an estimated $2 billion a day.

“The congestion, slowdowns and suspensions over the last few months have had a significant economic impact on the entire supply chain and those who rely on the West Coast ports to move their goods and products around the world and throughout the country," said National Retail Federation President and CEO Matthew Shay. "The agricultural, manufacturing, retailing and transportation industries have all suffered due to the nine-month long contract negotiations."

Distributors told MDM the port slowdown was disastrous for their operations. They had to adjust their inventory management and, in some cases, reorganize their supply chain to find alternate shipping methods, such as air, alternate suppliers in the U.S. or alternate ports for their shipment arrivals.

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