U.S. Labor Secretary Marty Walsh remained optimistic about contract negotiations between workers and shipping companies for some of the country’s most important ports, even as talks extend past a previous deadline.
Walsh’s comments come as union dockworkers at 29 West Coast shipping hubs were unable to reach an agreement with port employers before the current contract’s expiration on July 1. Both sides have pledged to continue normal operations at ports until an agreement is reached. Still, the prospect of an informal work slowdown has shippers on edge. More than 150 agriculture and business groups are urging the Biden administration to get the two sides in labor talks on West Coast shipping operations to extend their current contract while a new agreement is finalized. The contract between the Pacific Maritime Association (PMA), which represents port operators, and the International Longshore and Warehouse Union (ILWU), which represents dock workers, expires July 1.
In a letter to President Biden, the groups also suggested the administration work with the PMA and ILWU to get them to remain at the negotiating table, negotiate in good faith until a new contract is reached and agree not to engage in any activity, such as a strike or lockout, that disrupts port operations. The agriculture and business organizations want to avoid disruptions such as those that occurred in late 2014 into early 2015 at West Coast ports. Work slowdowns then cost the U.S. meat industry millions of dollars in lost export sales.
Freight rates are starting to fall as shipping demand wavers and the U.S. economy slows.
The reduction in transportation costs is good news for manufacturers and retailers after two years of rapidly rising expenses. The Wall Street Journal reports it also suggests the contribution of the freight sector to inflation is at least leveling off, though shippers note they are still paying several times more than they did before the Covid-19 pandemic snarled supply chains world-wide. Meanwhile, the Global Port Tracker projects containerized imports into the U.S. will turn negative on an annual basis next month.
