Already strained supply chain at risk in ongoing port labor talks
More tieups at West Coast ports are just about the last thing the US economy needs right now.
Delays caused by a flood of cargo last year continue to create widespread shortages of goods throughout the economy and added to inflationary pressures.
But a current round of labor talks between management at the 29 ports up and down the coast and the International Longshore and Warehouse Union whose members load and unload the ships has businesses that depend on the ports very, very worried.
"I'm extremely nervous. I've seen this movie before," said Isaac Larian, CEO of toy maker MGA Entertainment, best known for its Bratz dolls. "There's no real alternative to using these ports. I'm praying twice a day, rather than once."
The contract that covers about 16,000 members of the International Longshore and Warehouse Union working at the ports is due to expire July 1. At this point, it's unlikely a deal will be reached before that date.
Management and the union issued a statement last week trying to assure businesses that even though the two sides don't expect to reach a new deal before next month, they're ready and willing to keep working under terms of the existing contract.
"Neither party is preparing for a strike or a lockout, contrary to speculation in news reports," said the joint statement. "The parties remain focused on and committed to reaching an agreement."
But experts say companies that depend on the ports have every reason to be worried.
"There's definitely nervousness, and there should be," said Peter Tirschwell, vice president of S&P Global Intelligence, who tracks maritime and port issues. He pointed out that President Joe Biden took time out during a trip to Los Angeles earlier this month to meet with the heads of both the ILWU and the Pacific Maritime Association (PMA), the group that represents the ship lines and terminal operators in the labor talks.
"The perception of risk is so great that the president of the United States felt he needed to meet and knock heads together," said Tirschwell. "More problems at the port is the last thing he needs."