Topline:
The decision by dockworkers on Thursday to suspend their work stoppage at ports across the East and Gulf coasts prevented what could have been a significant economic impact in California, despite all the planning West Coast ports did in advance.
How the strike could have affected the ports of Los Angeles and Long Beach? Gene Seroka, the executive director of the port of Los Angeles, said shipping companies have already been diverting goods to the West Coast ahead of the strike, and it's been the port's busiest three-month period in its history. The Long Beach port also reported its best month on record this August.
Were we prepared? Seroka has said that the ports had capacity to handle more cargo. But if the strike had lasted more than a few days, he said there would be a build up of ships at the closed ports.
How the strike could have affected prices? The shutdowns would have led to higher shipping costs, and are likely to affect smaller and mid-sized retailers, according to Panos Kouvelis, a supply chain expert at Washington University in Saint Louis's business school.
The decision by dockworkers on Thursday to suspend their work stoppage at ports across the East and Gulf coasts prevented what could have been a significant economic impact in California, despite all the planning West Coast ports did in advance.
"The West Coast cannot absorb all the disruption on the East Coast," UCLA professor of supply chain management Chris Tang told LAist. "I think that if the strike can [end] within a couple of weeks, the disruption would be minimal. If it goes on for over one month, that is a different story."
The International Longshoremen's Association agreed to suspend the strike after an offer for better wages.
Had the shut downs continued, they could have led to higher shipping costs, likely affecting smaller retailers, according to Panos Kouvelis, a supply chain expert at Washington University in Saint Louis's business school.
"If [small and midsize retailers and suppliers] are not ready to deal with the disruption, even on a short-term basis, it can lead to a bottleneck in production," Kouvelis said in an interview published by the university. "For example, you need every car part to build or maintain a car — a few missing parts from local suppliers can throw a wrench in the entire production."
Ports of LA and Long Beach preparations
The ports of Los Angeles and Long Beach said they had capacity to handle extra cargo, in part due to changes made after major backlogs during the COVID-19 pandemic.
Gene Seroka, the executive director of the port of Los Angeles, said shipping companies had already been diverting goods to the West Coast ahead of the strike, marking the port's busiest three-month period in its history.
The Long Beach port also reported its best month on record this August.
Seroka has also said that the ports have capacity to handle more cargo. But if the strike had lasted more than a few days, he said there would be a build up of ships at the closed ports.
"For every week these ports are closed, it probably takes a month to six weeks to clean up the backlog," Seroka said.
What was the strike about?
The roughly 45,000 striking dockworkers, represented by the International Longshoremen's Association, were calling for a 77% wage increase over six years to keep up with inflation and the industry's record profits. They also want protections from automation.
West Coast dockworkers, including at the ports of LA and Long Beach, are represented by a different union, the International Longshore and Warehouse Union. The ILWU ratified a new contract with shipping companies last year, and concerns about automation were key in those negotiations, too.
According to a recent report by the UCLA Labor Center, the West Coast longshore worker contract included manning requirements in terminals using automated equipment. It also solidified the role of "automation clerks" to monitor cargo being handled by automation equipment and said that future decisions about automation would be discussed between the union and employers.
