Fragile automotive supply chains are facing another challenge as a long-simmering dispute about a labor contract could disrupt traffic through key ports along the West Coast.
Some 22,000 members of the International Longshoreman and Warehouse Union have been without a contract since last July and they now begun to increase the pressure on Pacific Maritime Association, which represents terminal operators up and down the West Coast.
West Coast ports hit by work stoppages
At critical ports such as Los Angeles – Long Beach, the longshoremen have begun job actions such as slowdowns to disrupt port operations slowing the flow of goods through the ports such as auto parts. Auto parts are the second-largest category of goods to flow through L.A. into the United States, according to the Port of Los Angeles Statistics.
One of the biggest operations is Toyota Logistics, which operates on more than 160 acres fronting the waterfront in Long Beach. Scott Vazin, Toyota spokesman, said there have not been any disruptions at the automaker’s assembly plants in the U.S. because of the disruptions at the ports on the West Coast.
But according to the Toyota Logistics website more than 200,000 Toyota and Lexus vehicles pass through the Long Beach terminal annually as well as key parts such as engines, transmissions and hybrid systems used in Toyota/Lexus vehicles assembled elsewhere.
Imports into the U.S. by Nissan, Infiniti, Mazda, Subaru, Kia and Hyundai/Genesis all flow through West Coast terminals from Seattle to L.A. at a time when inventories are finally reaching levels needed to meet consumer demand.
Honda, which has suffered through a sales downturn due to what the company described as supply shortages, said its sales increased by more than 50% in May as supplies finally normalized. Another company potentially at risk is the Vietnamese manufacturers VinFast, which is importing vehicles in the U.S. now and BYD, which assembles buses in California with battery systems made in China.
Unrest has simmered for a year now
The labor unrest along the West Coast have been building for several months, but the ILWU noted in a post left on its Facebook page “any reports that negotiations have broken down are false.”
The two parties have been negotiating a new collective bargaining agreement, which would cover more than 22,000 longshore workers at 29 U.S. West Coast ports. Their previous agreement expired July 1, 2022.
ILWU said PMA represents more than 70 multi-national ocean carriers and maritime companies in contract negotiations with ILWU.
“PMA member carriers and terminal operators made historic profits of $510 billion during the pandemic,” ILWU said in a statement. “In some cases, profits jumped nearly 1,000%.”
“As shipping volumes return to normal in 2023, PMA members have continued to post revenues that far exceed pre-pandemic times by billions of dollars,” the dockworkers’ union added.
Union deploys work stoppages rather than strikes
In early April, PMA alleged a worker shortage shut down the ports of L.A. and Long Beach — by far the nation’s busiest — for two days. The ILWU attributed the dockworker shortage to union members attending its monthly meeting and observing religious holidays.
The union stated it is “committed to bargaining a contract that is fair and equitable,” including wages and benefits that “reflect the dedication of the ILWU workforce and its contributions to the shipping industry’s success.”
Starting last week, according to the port operators, the ILWU has continued to stage concerted and disruptive work actions that have slowed operations at key marine terminals at the Ports of Los Angeles and Long Beach and elsewhere on the West Coast, including the Ports of Oakland and Seattle.
Union leaders are implementing many familiar disruptive tactics from their job action playbook, including refusing to dispatch workers to marine terminals, slowing operations, and making unfounded health and safety claims. The ILWU’s coast-wide work actions since June 2 are forcing retailers, manufacturers and other shippers to shift cargo away from the West Coast in favor of ports on the Atlantic and Gulf coasts.
Much of the diverted cargo may never return to the West Coast. Cargo diversion eliminates quality jobs far beyond the docks, including truck drivers, warehouse workers, and thousands of others whose livelihoods depend on ongoing operations at the port, the PMA tweeted.
