Gene Seroka, Executive Director of the Port of Los Angeles, discusses the key issue of the impending Kabuto Port Strike: Coast to Coast.
potential strike Unionized longshoremen It could begin Tuesday at East Coast and Gulf Coast ports, raising questions about whether West Coast ports are viable alternative destinations for offloading cargo.
The International Longshoremen's Association (ILA), which represents 45,000 longshoremen, and the United States Maritime Union (USMX), which represents port employers, are at an impasse in negotiations over the union's demands for compensation and protection from automation. There is. The union's current six-year contract expires on Monday night, raising the possibility that the ILA will go on strike for the first time since 1977.
The 36-year-old port workers could go on strike as time dwindles between the two countries to reach an agreement to avoid a work stoppage. Eastern and Gulf ports That could halt about half of the country's imports, raising questions about whether shipments can be redirected to the West Coast.
Douglas Kent, vice president of corporate and strategic alliances at the Society for Supply Chain Management (ASCM), said in an interview with FOX Business that while it makes sense to consider alternative destinations to reduce risk, “West Coast ports cannot accommodate additional ports.” 50% of our products come from there. ”
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If a last-minute deal is not reached by midnight on September 30, ILA dockworkers could go on strike. (Sam Wolfe/Bloomberg via Getty Images/Getty Images)
“Panama Canal traffic is severely restricted due to the drought, and even that is not always the answer,” Kent said. “Assuming there is no backorder on the other side, it will take an additional week or more to ship. Therefore, the cost associated with rerouting a shipment should not be underestimated either.”
Kent said ports on the East Coast and Gulf of Mexico handle a large amount of cargo to and from Europe, while ports on the West Coast handle the bulk of trade with Asia, so it is important to consider production capacity and costs. He explained that a trade decision needed to be made. Shipping route change.
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The Port of Savannah is one of the ports where outages may occur. (Ilya Nouberge/Bloomberg via Getty Images/Getty Images)
“I don't think there will be a lot of rerouting. I think the West Coast ports are preparing for the increase in traffic that will come with it. But the ability of the ports to absorb nearly 50% of the rerouting will be limited by the amount of imports. “It's not at all unlikely,” Kent said.
“What they don't want to do is also unintentionally put a strain on their own operations,” he explained. “So I think they have to keep that factor in mind as well in terms of potential route changes. They don't want to break it because they're loyal to them and have excluded them.”
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The Port of Baltimore is the largest hub for motor vehicle transportation. (Jim Watson/AFP via Getty Images/Getty Images)
Gene Seroka, executive director of the Port of Los Angeles, said in an interview on FOX Business Network.Kabuto: From coast to coast“When it comes to situations like this, very few people win. These workers have to be paid. Companies have to continue to reinvest and bring in cargo so that this great Jobs will be created from Maine to Texas for unions and their employer associations.”
Host Neil Kabuto asked Seroka about the likely timing of a port strike ahead of the holiday season, considering whether shoppers will have access to in-demand products.
“The timing couldn't have been worse,” Seroka said. “We're on the verge of a retail holiday season, and if you put aside for a moment the big retailers who had the means to bring their cargo forward from other ports and prepare their inventory, it's not that much. It's a small one – the medium-sized businesses I'm concerned about typically run this scheme in the last 12 weeks before a holiday to pay salaries and keep the business afloat, but that's now at risk. There is.”
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The Port of Miami is one of the ports where construction may be halted. (Joe Radle/Getty Images/Getty Images)
This is what the ports on the west coast look like Los Angeles, Long Beach, Oakland Seattle and Tacoma are major ports that could be destinations for rerouted cargo. Port operators do not expect any significant impact.
A Port of Oakland spokesperson told FOX Business: “We do not expect a strike by East Coast longshoremen to have a significant impact on cargo operations at the Port of Oakland.”
Mario Cordero, CEO of the Port of Long Beach, told FOX Business that the port is “handling a record amount of cargo in a fluid manner” and said the Port of Long Beach is “handling a record amount of cargo in a fluid manner” and that longshoremen at the East and Gulf ports are in short supply. He said he was ready to respond as necessary if the strike progressed.
“We hope to reach a timely and mutually beneficial solution to the contract covering the East Coast and Gulf Coast. We will rely on the close relationships we have built with our partners in the sector and work to keep supplies flowing, “chains moving and the U.S. economy functioning,'' Cordero said. “If there is any disruption to freight transport in the region as a result of work stoppages in other regions, we remain ready to activate our Business Recovery Task Force for the foreseeable future.”
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Potential port strike possibility harm the US economy JPMorgan analysis estimates it to be in the range of $3.8 billion to $4.5 billion per day, which works out to more than $5 billion per day. Some of it will be recovered after the strike ends, and the port will resume normal operations over time.
The 36 ports on the East Coast and Gulf Coast that could be affected by the strike collectively handle half of seaborne imports into the United States. agricultural products In addition to automobile imports, this includes imports of machinery, processed steel products, and precision equipment. These ports are also important hubs for U.S. agricultural and pharmaceutical exports.
FOX Business' Aislinn Murphy contributed to this report.
