WEST COAST, U.S. - With the ongoing threat of strike or work slowdown at West Coast ports, Fitch Ratings says that cargo may already be being diverted to other distribution methods, setting the stage for broad economic impacts and potentially leading to permanent changes.
The International Longshore and Warehouse Union (ILWU) workers are currently working without a contact and could strike at any time. Fitch does note however that recent ILWU and Pacific Maritime Association negotiations are amicable with cargo moving through West Coast ports without incident since the contract expired on June 30.
As we previously reported, Retailers and economists across the country certainly hope for a speedy resolution of this conflict which threatens to further disrupt an already fragile U.S. economy. This is because any closure of America's western ports, especially those at Seattle, Los Angeles, and Long Beach, California could have dire economic consequences. According to a study by the Interindustry Forecasting Project at the University of Maryland, the results of even a 5-day shut-down would be estimated to reduce GDP by $1.9 billion a day, disrupt 73,000 jobs, and reduce the purchasing power of the average American household by $81. These costs would only grow with the length of the strike.
To read our previous article on the negotiations, click here.
MarineNews reports that though a long-term strike is not likely, some shippers may be diverting their cargo to avoid potential problems. Last week, DP World Vancouver, a terminal at the Vancouver port seeing diversions of West Coast cargo, stopped receiving U.S.-bound containers destined for rail transfers at its Centerm terminal, reporting a shortage of rail cars.
Any potential labor action is expected to be short if it occurs. MarineNews reports that the size of the impact of the action is likely to motivate President Obama to invoke the emergency provisions of the Taft-Hartley Act.
Stay tuned to AndNowUKnow for any updates on this ongoing situation.
