There is positive news related to the U.S. west coast ports labor talk negotiations that impacted many industry supply chains during the latter-half of 2014 and the early months of this year.

The members of the Pacific Maritime Association (PMA), operators of the majority of ports along the U.S. West coast have voted overwhelmingly to ratify a new five-year contract with the International Longshore &Warehouse Union. The contract, when ratified by the ILWU, is retroactive to July 1, 2014 and will run through June 30, 2019. In early April, an ILWU Caucus delegation voted to recommend approval of the tentative agreement reached in February. Copies of the agreement were earlier mailed to longshore union members, who were afforded the time to discuss the ratified proposal at local union meetings.  A secret ballot full union membership ratification vote was the final step in the process and the final tally is expected to be announced tomorrow.

The new five year widow should provide some comfort for industry supply chains in terms of avoiding labor slowdowns across U.S. west coast ports.  The PMA announcement of ratification includes a statement from the CEO of PMA noting that port management looks forward to winning back the trust and confidence of the shipping community.  That was obviously a required and long overdue statement.

As Supply Chain Matters has pointed out, there are ongoing infrastructure, productivity and automation challenges needing to be addressed as larger mega-container ships continue to enter into service.  Any future snafu or disruption affecting the physical flow of containers and container chassis from foreign ports to U.S. posts will provide a likely impact on industry supply chains.

During the next five years, the expanded Panama Canal will finally open and shippers will be provided added options for shipping containers and goods directly to U.S. East Coast ports.  Many of the U.S. east coast ports are preparing for that milestone by investing in deeper ship channels, expanded infrastructure, distribution facilities and transportation options.  The open question is now which coast is better prepared to offer economic advantages.

Bob Ferrari