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America’s fashion industry collectively winced at the end of June when the deadline to conclude negotiations over the contracts of 22,000 dockworkers employed across 29 ports on the West Coast expired without an agreement.
Talks are continuing and the ports remain operational for now. However, any industrial action could cause further delays in a stretched supply chain that has already been disrupted by two years of pandemic chaos. Experts say it may be time for a bigger rethink of the system, to avoid future shocks.
Nearly half of US imports come through the West Coast ports, the biggest of which are Los Angeles and Long Beach. “Retailers are worried about a potential lockout [a work stoppage initiated by the employer], which would further slow shipping speeds and push fuel prices up,” says Antonello Germano, business analyst at research firm Daxue Consulting. He underlines the challenges facing fashion in particular: “This is a busy season for California ports as retailers are starting to stock up on Autumn/Winter inventory. Retailers risk not having their new collections in time.”
The International Longshore and Warehouse Union (ILWU), which represents the dockworkers, and Pacific Maritime Association (PMA), which represents ocean carriers and terminal operators, have been negotiating on renewing the dockworkers’ contracts since May. In a joint statement released as the deadline passed, the two parties said they understood the importance of the deal to the local and national economies, but did not comment on why an agreement had not been reached. According to local media reports, the dispute largely rests on proposals to further automate dockyard work. The ILWU and PMA declined to comment on the negotiations to Vogue Business.
Although the talks continue, there has been no contract extension, meaning the dockworkers are free to take industrial action (the previous contract prohibited employee-initiated work stoppages). Work stoppages and slowdowns have happened during these contract negotiations in the past, disrupting the flow of goods in and out of the US. In a letter to president Joe Biden sent before the contract expired, concerned business groups, including the American Apparel & Footwear Association, warned any work stoppage on the ports would lead to “backups, delays, and inflationary costs”.