While West Coast ports are functions at mostly full speed and capacity after port closings threatened to postpone production for the near-future, expert forecasts predict a lengthy backlog that could take months to clear.
One of the biggest obstacles was cleared last Saturday evening when the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union agreed to a tentative, new five-year labor contract at the end of last week that is only pending member ratification.
While the ports are re-opened, there are still hurdles to clear before a sense of normalcy returns. Tensions remain high after Port of Oakland workers were dismissed on Sunday after taking their breaks together and replaced by new crews after an arbitrator ruled that the union’s action constituted as an “illegal work stoppage.” Further south in the Los Angeles and Long Beach ports, the amount of ships in anchor and waiting to get into the docks had increased from 27 to 31 over the weekend; at least two dozen more were also headed that way.
To find a past example of a backlog of this magnitude, one would have to look no further than 2002, when a 10-day lockout (not coincidentally, involving the same groups) took nearly three months to return to normal levels of productions and cost the U.S. economy an estimated $1 billion per day. While this time around, the labor disputes never resulted in a total port shutdown, the slowdowns also were spread over a longer, nearly three month period from November to December – a key difference between the 2002 lockout and now; a difference that many are still attempting to predict the full outcomes.
Experts predict that the U.S. supply chain, based heavily around clothing and auto parts, could take anywhere from two to six months to return to normal levels of production.
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We will be keeping an eye on this developing story and will have an update as soon as any major developments occur.
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(SOURCE: Wall Street Journal)
