A breakdown in contract negotiations between labor and management at America's west coast ports is threatening to turn a slowdown into a full-scale strike, and an economic headache into a full-blown crisis that impacts the entire American economy.
On Wednesday, talks between the Pacific Maritime Association (PMA) representing port management, and the International Longshore and Warehouse Union (ILWU) moved one step closer to a breakdown, and without an agreement, experts have suggested that nearly 30 west coast ports could be shut down within a week. A work slowdown during contract negotiations over the past seven months has already created logistic nightmares for American exporters, manufacturers and retailers dependent on an efficient supply chain. A complete shutdown would be catastrophic, with hundreds of thousands of jobs at risk if America's supply chain grinds to a halt.
"A west coast port shutdown would be an economic disaster," said Kelly Kolb, vice president of government affairs for the Retail Industry Leaders Association. "A shutdown would not only impact the hundreds of thousands of jobs working directly in America's transportation supply chain, but the reality is the entire economy would be impacted as exports sit on docks and imports sit in the harbor waiting for manufacturers to build products and retailers to stock shelves.
"The slowdown is already making life difficult, but a shutdown could derail the economy completely," said Kolb. "For retailers specifically, a shutdown will have dire consequences for those dependent on spring inventory demand."
The last prolonged port shutdown of the West Coast ports was the 10-day lockout in 2002 which was estimated to cost the U.S. economy close to $1 billion a day.
"A port shutdown of even a short duration could de-rail economic growth and cause long-lasting damage and job losses across the country," said Kolb. "There needs to be a greater sense of urgency at the White House, before it's too late."
RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.