While most of the nation’s West Coast ports have ended a lengthy delay last weekend with the signing of a tentative labor contract between the port employers and longshoremen’s union, levels of production are slowly returning to normal levels.
For many port workers, during the delays and closings, the negotiation process meant fewer shift assignments. Early this week, signs pointed to those shift levels gradually returning. In January, the Pacific Maritime Association (representing port employers) were locked in a bitter dispute with the International Longshore and Warehouse Union, accusing them of scaling back qualified crane operators available for shifts, slowing already-congested port operations. Adding to the backlog, the PMA reduced the amount of port workers for unloading the ships during the nightshift. Both sides blamed each other for the delays and backlogs.
The delays and closings had a trickle-down effect in multiple industries across the country. In recent weeks, retailers have been experiencing shortages of products on shelves while agricultural exporters complained about good that were spoiled during the delays. Certain auto manufacturers took to flying in parts in order to keep plants in operation. Smaller businesses with limited inventory faced shortages while certain apparel companies faced their own delays, fearing products would not be delivered in time for spring orders.
The U.S. Manufacturing industry was hurt by the port delays as a whole, also. The Institute for Supply Management announced that the supply disruptions as a result of the West Coast labor strife cut February’s top-line purchasing managers’ index to 52.9 in February (down from 53.5 in January), the fourth consecutive monthly decline in the index. However, the ISM indexes for production, employment and new orders still indicated that all activity in those areas actually expanded, albeit at a slower pace than the previous two months.
The Institute for Supply Management said Monday that supply disruptions stemming from the West Coast ports labor strife pulled down its top-line purchasing managers’ index to 52.9 in February, from 53.5 in January. It was the fourth consecutive monthly decline in the index, though its above 50 indicates the sector remains in expansion. In addition, exports had also reported a similar slowdown with only 3 of 18 industries surveyed reporting an increasing in foreign demand.
While the labor contract should allow manufacturing levels to gradually start to return to pre-dispute levels, many industry groups are weary of the effects of the port closings and cautioning that a disruption of this level simply cannot be allowed to happen again. The National Retail Federation, the American Apparel & Footwear Association and the Agriculture Transportation Coalition all called for a quick ratification of the agreement and vocally expressed their reservations about the delays. Even the White House was concerned enough to send Secretary of Labor Thomas Perez to join the negotiations last week, urging both parties to come to a quick agreement.
Included in the contract between the ILWU and PMA included new pay, health-care and pension agreements, along with a new arbitration system though the specific details have not yet been released.
Experts estimate that it could take at least several month to get the U.S. supply chain to pre-production levels, though the signs are encouraging that delays and backlogs would be resolved sooner than later with PMA employers calling for 3,959 daytime and 1,443 nighttime workers at the ports of L.A. and Long Beach on Monday, up from 1,614 and 935 on Friday.
(source: Wall Street Journal)
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