February 20, 2015
The ILWU and PMA have finally come to a tentative contract agreement. The ILWU has been working without a contract since July 2014. In that time, we have seen the West Coast ports come to a virtual standstill.
Details about the contract are still unknown. Both the PMA and ILWU have to ratify the contract. It does look like having the Secretary of Labor, Tom Perez, join in the contract negotiation process earlier this week has helped push the two sides come to a contract agreement.
Assuming the contract is ratified by both sides, it still is going to take months for the congestion to unwind. Importers and exporters should not expect ports to suddenly start operating efficiently. There is still a backlog of containers that need to be picked up from the ports as well as export and empty containers that need to be returned to the port. Furthermore, vessels are all over the place. Carriers will need months to get their schedules back on track. Most importantly, the basic infrastructural issues that have contributed to port congestion remain unresolved.
I will look on the bright side and say that we hopefully have the worst behind us (at least until this five year contract expires). I am happy to finally have some good news to announce after months of negative news.
Have a great weekend everyone.
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