Distributors hoping to get their supply chains back on track this week will have to keep waiting. That's because the labor strife disrupting West Coast ports wasn't resolved Monday, despite both sides sitting down at the bargaining table and nearly six months without a contract.
As I detailed earlier this week, stalled contract talks between shipping lines and longshoremen have caused slowdowns at ports from Tacoma, WA, down to Long Beach, CA, wreaking havoc on inventory management for any business that imports from the Pacific Rim – in other words, the vast majority of U.S. companies.
The Pacific Maritime Association, which represents the port operators, and the Longshoremen Workers Union, which represents 20,000 dockworkers, met Monday, Dec. 15, to discuss a new contract, but to no avail. The two sides have been working without a deal since June 30, although congestion at the ports didn't begin until October – the PMA claims the LWU is deliberately slowing down shipments and the union, in turn, blames the increased volume of cargo containers for the delays.
Few details are available because neither side will speak to the media about the talks or the issues where they disagree, but this week CNBC did quote union spokesman Craig Merrilees, who said, "Both sides are working hard, and every day they get a little more done, and every day they get closer to a settlement."
Until they do, distributors and manufacturers will continue scrambling to find solutions for this supply chain snafu, such as adjusting their inventories. If the slowdown lingers, they might consider ports on other coasts or using alternate modes of transportation, both of which would add cost. And while some in the industry were more than willing to go public with their concerns about the situation, which is causing backorders and inflated inventories, others weren't so willing.
One distributor who wished to remain anonymous told me his company has about 60 containers sitting on the Port of Los Angeles dock, making every day a guessing game as to which cargo shows up. Even retail behemoths such as Walmart, he said, have thousands of containers sitting idle, making this slowdown "an absolute disaster."
