Troubled waters

Okay, the trouble is actually on the shore, where labor relations at the US West Coast ocean ports are approaching a meltdown, but it has the potential to bring ocean shipping to a halt at the region’s ports.

After months of steadily increasing backlogs due to slowdowns by port workers unhappy with contract negotiations, The Pacific Maritime Association (PMA), which represents port employers, made what it called its “final offer.” But the offer was not accepted by the International Longshore and Warehouse Union, and the slowdowns continued as the rhetoric increased in volume.

Late last week, the PMA took the unprecedented step of halting weekend operations at the ports to avoid paying overtime rates. While this is understandable from the employers’ point of view — why pay overtime for work that should have been done during regular time — it will have the effect of increasing the backlogs even further.

If, as seems likely, the two sides continue to stand their ground, a strike or lockout is a strong possibility – which will provide a significant boost to air freight demand as shippers and forwarders scramble to find an alternative to ocean.