What does the West Coast labor fight mean for small business owners?
West Coast ports are experiencing a buildup of ships, and the cost of commercial shipping is surging due to a labor dispute between port operators and workers. This conflict poses a significant risk of triggering another wave of supply chain disruptions, potentially resulting in shortages and increased prices.
Lawmakers are expressing concerns as the ongoing conflict raises worries about the potential ripple effect of soaring container prices on the economy. They fear a repetition of the supply chain issues experienced during the pandemic shutdowns, which affected various consumer goods.
According to data from the logistics platform Go Comet, there’s been a noticeable increase in median delay times this week at crucial West Coast ports such as Los Angeles, Seattle, and Long Beach, California. Currently, the wait times at the port of Seattle have exceeded one week. Based on data analyst findings, shipping container rates on the West Coast are witnessing a significant and rapid escalation.
Closed-door negotiations are currently taking place between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). The ILWU represents approximately 42,000 workers across 60 chapters in Pacific ports, while the PMA negotiates on behalf of 70 shipping companies and terminal operators at 29 West Coast ports.
In an attempt to exert pressure on management, workers are engaging in organized work stoppages, while operators are accusing them of employing “disruption tactics.” These tactics involve actions such as refusing to dispatch workers to marine terminals, deliberately slowing down operations, and making unsupported health and safety claims, as stated by the PMA.
The ongoing discussions are drawing significant attention from both the White House and lawmakers in Congress, who are closely monitoring the negotiations and hoping for an easy and painless resolution.
The current negotiations primarily revolve around wage levels, distinct from previous concerns regarding benefits or paid time off. Last year, a potential railroad strike posed a risk to national distribution pipelines, but the current talks focus on resolving wage-related matters.
In 2022, work stoppages surged due to the impact of high inflation on wages and the rising cost of living. This trend was observed in numerous countries worldwide. Unfortunately, history always seems to repeat itself.
As a small business owner, you can manage the supply chain crisis by being transparent with your customers or clients and keeping communication lines open. No matter what type of business you own, maintaining openness with your team and customers goes a long way. Hang in there!