The ongoing labor dispute at West Coast ports is getting federal attention, with the U.S. Federal Mediation and Conciliation Service agreeing to send a senior mediator to move negotiations forward.
“We are prepared and ready to render prompt assistance,” said Allison Beck, acting director of the FMCS. The move is an about-face from the White House’s position in November, as reported by Bloomberg at the time.
The FMCS is not releasing information regarding future meeting dates and locations, per agency policy. In addition, the FMCS says it will have no further comment regarding the status or substance of the negotiations at this time.
The slowdown, which involves 29 ports and hundreds of billions of dollars in imports and exports, is taking a toll on U.S. commerce, but not only for the produce suppliers whose fruits and vegetables are rotting inside idle shipping containers or the retailers whose delayed goods garnered headlines in December because of the holiday season.
Distributors and manufacturers are also being disrupted by this giant kink in the global supply chain. The stalled contract talks between shipping lines and longshoremen are holding up companies’ Pacific Rim imports at docks from Tacoma, WA, to Long Beach, CA.
The Pacific Maritime Association, which represents West Coast port operators, claims the Longshoremen Workers Union is deliberately slacking on unloading containers from ships that arrive from Asia. The union attributes the slowdown to increased volume and dock equipment shortage. Members of the union have been working without a contract since July 1, 2014.
Andy Mitchell, director of supply chain and marketing at jan-san and safety equipment distributor CCP Industries, which imports 80 to 100 containers each month from China and Malaysia, said the company has been experiencing delays of two to four weeks because of the slowdown.
“It has been very challenging on our supply chain, causing back orders and increased investment in inventory levels,” says Mitchell, who worries that the disruption could have a devastating and lasting effect nationally. “Shipping lines were expecting things to improve in October 2014 and they did not. And with an improved U.S. economy forecast for 2015 and continued tight capacity, there is no light at the end of the tunnel.”
Bill Childers, president of bearing manufacturer C&U Americas, Plymouth, MI, said the port slowdown is causing major headaches for his company, which imports a couple of containers a week into Long Beach. So far, however, Childers says the problem is about time rather than money, and careful inventory planning is critical.
“It’s probably the most painful thing we’re facing right now,” Childers says. “It’s costing a week or two for every shipment. What it means is we’ve got to order further and further ahead and allow for more of these delays. It ends up inflating our inventory.”
Childers says it doesn’t make sense to ship to other ports, like those on the Gulf or East coasts, because not only would that add the same amount of time the West Coast delays are already causing, but it would add shipping costs.