Slowed Cargo Flows at Northwest Ports Attributed to Rail, Labor Delays

As the combined ports of Seattle and Tacoma, Washington work to increase their market share among West Coast ports for containerized cargo volume, they have been faced with struggles with railroad transit times and increasingly heated labor negotiations. Containerized cargo volumes moving through North American West Coast ports have doubled since 2000, but the market share for Seattle and Tacoma has declined over that period from 15 percent to 9 percent.

Causes for the decline in market share has been attributed to slower rail transit times from the ports, in contrast to Canadian ports with newer, faster rail infrastructure. For the week ending October 25th, BNSF reported that 615 loaded grain cars and 103 intermodal cars sat for 120 hours or more. Union Pacific reported that it had 144 loaded grain cars and 74 intermodal cars sit for the week ending October 24th. The Port of Tacoma reports that the standard five-day transit time to the Midwest now takes seven or eight days due to rail congestion and railcar shortages. Much of the delay in moving loaded cars cross-country to and from the Midwest is due to BNSF system congestion related to oil development in the upper Midwest’s Bakken formation.

Additionally, the Pacific Maritime Association, which manages 29 West Coast ports including Seattle and Tacoma has accused the International Longshore and Warehouse Union of engaging in work slowdowns at the Puget Sound ports and raised fears that the slowdowns could expand to impact additional ports along the West Coast. The PMA and ILWU have been negotiating for a long-term contract since the previous labor agreement expired on July 1st, and had stated publicly that they would continue to work and bargain in good faith and without stoppage or slowdown to avoid major national economic

On Monday, November 3rd, the PMA issued a statement that ILWU slowdowns caused a 40 to 60 percent reduction in terminal productivity over the weekend. The union maintains that these accusations are a pressuring tactic with the goal of impacting the labor negotiation.

The slowdown in cargo processing in Washington, and possible threat of increased labor strife, will likely place additional pressures on West Coast ports in Canada and the U.S. The busiest American West Coast container ports, the Ports of Long Beach and Los Angeles, are already experiencing significant congestion and delays but could face additional difficulties. TIA staff will continue to monitor the negotiations and report updates as they occur.