West Coast ports have seen a decline from U.S. importers that have soured on their gates of entry after a year of uncertainty around port union worker contracts, according to The Wall Street Journal.
Ports from southern California to Seattle, represented by the Pacific Maritime Association (PMA), have been marred by uncertainty following a year of negotiations with the International Longshore and Warehouse Union (ILWU), with a deal being reached just last week for a six-year contract, according to the WSJ. Both importers and exporters that previously utilized the ports have been shifting business toward East Coast and Gulf Coast ports to avoid potential disruptions, with the ports of Los Angeles and Long Beach container volumes falling almost a quarter in the first six months of 2023 year-over-year.
“A lot of [importers] have found benefits with East Coast and Gulf Coast ports,” Jonathan Gold, vice president for supply chain at the National Retail Federation, told the WSJ. Gold noted that ports are spreading out their supply chains in an effort to be less dependent on one point of entry and that the East Coast presents greater proximity to growing manufacturing and population centers.
The West Coast has been experiencing a shrinking share of shipping volume compared to other parts of the U.S. over the past 20 years, with that shift gaining momentum during the COVID-19 pandemic and then accelerating even further during the last year during the dispute, according to the WSJ.
Just in June, the total share year-over-year of U.S. containerized import cargo that was handled by West Coast ports fell from 37% to 35%, according to the WSJ. Gene Seroka, executive director at the Port of Los Angeles, said in July that around 15% of the lost cargo volume can be attributed to shippers using other gateways to the U.S. outside of the West Coast.
The ILWU voted on Aug. 31 in favor of ratifying a new tentative contract agreement by 75% that will expire on July 1, 2028, according to a statement on the union’s Twitter. The agreement includes job protections for the 29 West Coast ports covered by the union, health benefits, improved wages, pensions and safety protections for its 20,000 unionized workers.
“The negotiations for this contract were protracted and challenging,” Willie Adams, ILWU international president, said in the Twitter statement. “I am grateful to our rank and file for their strength, to our Negotiating Committee for their vision and tenacity, and to those that supported giving the ILWU and PMA the space that we needed to get to this result.”
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