Dockworker Slowdown Costs $77 Million

Breakdowns in negotiation of a monopoly bargaining contract has resulted in a slowdown at West Coast ports that has lasted more than a year. Washington state has lost approximately $77 million in business due to the slowdown.  Andrew Soergel has the story in US News and World Report Online.

“This value represents the sum of net delinquent shipments and additional costs, specifically warehousing and truck idling fees,” the report said. “The port slowdown affected many local businesses that rely on waterborne containerized trade, including those that export to overseas clients and others that import items for manufacturing companies and inventories.”

A group of boats float on Tuesday, Feb. 17, 2015, near ports in Los Angeles and Long Beach, Calif. A West Coast labor dispute has sparked a cargo slowdown that’s sending ripples throughout the domestic economy.

In June 2014, a labor contract expired between the International Longshore and Warehouse Union, which last year represented roughly 20,000 dockworkers, and the Pacific Maritime Association, which helps negotiate contracts with port employees. The two parties could not immediately agree on wage and labor conditions and operated for more than six months without an official contract.

Tensions escalated between the union and the maritime association as labor negotiations stalled, and West Coast dockworkers were eventually accused of slowing down their work to cut productivity, effectively heaping pressure onto the maritime association to meet their demands while leaving cargo-laden ships unable to unload and stranded up and down the coast.

The new report estimates two of Washington state’s largest ports, the Port of Tacoma and the Port of Seattle, would have been able to process between 25 and 35 containers per hour under normal circumstances. During the slowdown, however, productivity was cut in half, with workers handling only about 10 to 18 containers per hour.

“You have multiple container vessels ready to unload, and we have companies in the United States waiting on that product that’s in those containers,” Tom Hullinger, chief operating officer at HNM Global Logistics, told U.S. News at the time. “And those containers, every day that they’re delayed, it’s costing the U.S. companies more money because of the detention fees the container lines have to impose on that equipment. This has a direct impact on commerce.”

Whether an end is in sight for costs related to last year’s port dispute remains to be seen. But a year since a resolution that was celebrated for bringing an end to months of West Coast port sluggishness, the economic consequences the dispute managed to generate appear to be anything but resolved.