Attention! How to arrange your cargo based on the progress of labor negotiations in US West ports?

Regarding the labor negotiations at West Coast ports, the shipping industry and Biden administration officials had hoped to conclude them last fall, starting from May of last year.

On January 25th, Mario Cordero, the executive director of the Port of Long Beach, stated in an interview with Bloomberg TV: "I thought we would reach a deal last year, but we'll see in the next month whether these political parties can unite and work around the clock to bring their differences and some compromises to the table."

"Everyone hopes to see the negotiations concluded, so that there will be no more uncertainty in the market and we can move forward," said the informed source

According to the Wall Street Journal, since last summer, the two sides have made no progress on regional issues, thereby delaying discussions on major contract terms, including wages and automation. The uncertainty faced by US retailers in importing Asian goods through the West Coast has caused increasing anxiety in the shipping industry.

The negotiations involve over 22,000 dockworkers across 29 ports from California to Washington State. Since the expiration of the previous multi-year agreement on July 1, 2022, the dockworkers have been working without a contract, and the parties have been unable to reach an agreement on renewal.

According to sources, both sides are hesitant on issues related to work in Seattle. The International Longshore and Warehouse Union and the International Association of Machinists and Aerospace Workers are arguing over which of the two unions should be assigned to work at a newly opened cargo handling factory there.

Some importers have already shifted furniture, clothing, and electronic products to ports on the East Coast and Gulf Coast in case labor negotiations collapse, leading to work disruptions or strikes.

Jonathan Gold, the vice president of supply chain at the National Retail Federation, said everyone was nervous about the uncertainty of the contract. Retailers usually start making plans in the first quarter to import goods for the peak shipping season in summer and autumn. Some retailers may also plan to divert goods to ports on the Gulf Coast and East Coast until they receive news of a deal.

A survey of logistics managers from major companies and trade organizations indicated that if a deal is reached between the ports and the International Longshore and Warehouse Union (ILWU), 18% of respondents said they would bring 10% of the diverted cargo back to the West Coast, another 12% said they would bring 20% of the cargo diverted to the East Coast back to the West Coast, and 12% were even more optimistic, saying they would bring 60% of the cargo previously diverted to the East Coast back to the West Coast. The negotiations this time, which will take longer than the last one, are taking place after the 2014-2015 negotiations, during which slowdowns caused significant losses for some retailers.

According to Xeneta's data, in the fourth week of 2023 for the Asia-North America shipping route, the freight rate from Asia to the west coast of North America was $1,588 per FEU, marking a 10.05% increase from the previous week and a 6.08% increase from the previous month.

Currently, there are some disruptions in individual operations at the container terminals in Los Angeles and Washington, but the port's cargo operations are mostly functioning as usual.

Ships from Asia to the West Coast of the United States are available. If foreign trade enterprises and cross-border e-commerce companies need to prepare and transport goods, it is best to book the shipping space 2 weeks before the sailing date. Additionally, they should keep a close eye on congestion and delays at US ports to ensure smooth handling of the goods!