West Coast Contract Finalized, while Container Cargo Continues Shift

The International Longshore and Warehouse Union (ILWU) approved a five-year contract negotiated with the Pacific Maritime Association (PMA). The contract, which was approved by the PMA on Thursday, May 21, will provide for about 20,000 jobs at 29 U.S. West Coast ports. The contract will stand in effect retroactive to July 1, 2014, when the previous six-year contract expired, and will run through July 1, 2019. Slow and contentious negotiations over the past year led to significant cargo backlogs along the U.S. West Coast, and cargo processing increases at U.S. East Coast and Gulf ports.

The National Retail Federation recently announced the results of a study showing a surge in U.S. port volumes due to processing of the container cargo backlog on the West Coast as well as strong volumes on the East Coast and Gulf Coast. Overall, volumes at major U.S. ports were estimated at 1.55 million TEUs, up 8.1 percent from 2014 levels, and May volumes are forecast at 1.56 million TEUs, a 5.4 percent increase over 2014. The NRF study relied on data gathered by Global Port Tracker at the ports of Los Angeles/Long Beach, Oakland, Seattle/Tacoma, New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami, and Houston.

Some West Coast ports will continue to feel the effects of shifting cargo volumes due to the pending opening of the Panama Canal expansion. In April, Hapag-Lloyd notified Pacific Northwest customers that it has ended service to the Port of Portland, Oregon, because of “schedule integrity” problems. Combined with the departure of Hanjin Shipping Co. in March, these shifts mark a significant change in shipping at not only Portland, but also the Port of Lewiston, Idaho, which is the country’s most inland port. While Hapag-Lloyd carried only 20 percent of the Port of Portland’s containers, it accounted for 90 percent of the Port of Lewiston’s containers. Port customers at Lewiston relied on containers and barges to ship wheat and legume crops overseas. Overall, the Port of Portland Container Terminal accounted for only 1 percent of the West Coast’s container shipping.

TIA closely monitors issues at U.S. ports for trends in domestic and international cargo volumes. For more information on this issue, or to participate in TIA’s International Logistics Conference, please contact Will Sehestedt (sehestedt@tianet.org, 703-299-5713).