A dispute between the International Longshore and Warehouse Union (ILWU), representing over 40,000 workers in Pacific ports and the Pacific Maritime Association (PMA) over demands for increased wages is already causing delays in shipping operations at some of the busiest ports in the country along the West Coast, and could soon have manufacturers experiencing yet another supply chain disruption.
Delay times are trending upwards in key West Coast ports, including Los Angeles, Seattle, and Long Beach, CA with week-over-week shipping costs already jumping by as much as 20% due to the increasing congestion.
While the White House and lawmakers continue to monitor the situation, negotiations are ongoing behind closed doors between the ILWU and the PMA. Manufacturers and businesses in general would do well to heed the lessons of the pandemic and post-pandemic supply chain nightmares, including the fact that even seemingly small disruptions at key points can, and often do, have ripple effects across the entire global supply chain, potentially resulting in increased manufacturing costs and delays.
Manufacturers should prepare now to help minimize negative impacts on your business from what could be a looming shipping crisis:
- Assess and check in with your suppliers to determine if they have plans in place to weather anticipated supply chain issues;
- Locate and/or line up alternative suppliers;
- Evaluate the suitability of potential product and component part substitutions;
- Review current contracts that may be impacted for force majeure and other relevant provisions; and
- Begin working with customers if delays are foreseen to head off potential issues.
Getting ahead of these issues proactively will help avoid the worst outcomes of any transportation shortage or slowdown.
For further information, please contact:
Jason R. Gagnon
This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.