Thomas J. Goldsby
February 24, 2015
Influences of West Coast Ports Stalemate
Beginning in May 2014, dockworkers in west coast ports started slowing their work and therefore causing cargo delay significantly. As a main ports area of United States, it links Asia and West Coast, unloading thousands of tons of goods every day from fruits to manufacturing parts. A number of producers rely on west coast ports to supply their production. However, disruptions in 29 west coast ports have delayed productions and affected the U.S. economy. Finally, on February 20, the negotiations between west coast ports’ dockworkers and their employers were ended up with a tentative labor ...view middle of the document...
Take Nature USA as an example. They usually have enough raw materials to keep their factories at a normal level of output for ten weeks. While due to the stalemate in west coast ports, they expect to run out of inventories in one month (Shan Lin, Diana Marcum, 2015).
On the other hand, the influence that the strike has on US economy is long-lasting. Even having reached an agreement in west coast ports recently, it would take dockworkers several weeks even months to clear the backlog in ports. Gene Seroka, the executive director of the Port of Los Angeles, said that “Just based on the mathematics, it will be about three months before we return to a sense of normalcy,” (Laura Stevens, 2015). During that period, imports and exports are still badly delayed. As an essential component of U.S. transportation infrastructure, 43% of U.S imports and 27% of exports are loaded and unloaded in west coast ports. Macy’s Inc., one of the nation’s premier retailers, encounters a decrease in sales and margins because of labor dispute in the first quarter of 2015. 12% of merchandise receipts can’t arrive at their warehouse on time. As a result of that, some of their sales are delayed and, more seriously, cancelled by customers, leading to a fall in their profits and shares. After workers returned to work on Saturday, there are tons of cargo waiting to be unloaded and transported to buyers.
Last but not least, this months-long labor flare-up has made shippers unconfident about west coast ports because of the potential of another fight in the future. Producers, shippers, retailers, farmers, and exporters all experienced painful period in the chaos. Because of the massive delays of products, people lost billions of dollars across the world. For instance, farmers who export fresh fruits, vegetables, and other perishable goods concern that slowdown in west coast ports would decrease the value and quality of their...