Your iPhone, television, maybe even the clothes on your back first came to the United States through Southern California. The twin ports of Los Angeles and Long Beach do almost $400 billion worth of trade with the world. And that business may grind to a halt in the week ahead.
In these days of instantaneous communications, same-day delivery expectations and integrated just-in-time business models, moving big boxes of corrugated steel can be a pinch point for global trade. These two ports in California are key for America’s trade with China accounting for a third of the business between the two countries.
For nine months, the union representing dockworkers has been negotiating with the ports’ operator, Pacific Maritime Association, with no resolution. PMA contends union workers have slowed down their work. The labor group blames bigger shipping containers and the lack of equipment to haul them away.
Cargo ships have been lining up in the Pacific, laden with overseas goods looking for U.S. consumers, unable to unload. Ports from San Diego to Seattle have been threatened by the labor strife in Los Angeles and resulting backlog of business.
It’s unlikely a short port shutdown would have major economic consequences. It is business delayed, not destroyed. Those most at risk are the warehouse workers relying on a steady diet of cargo to transfer and transport from the West Coast to the rest of the U.S. A longer slowdown or even shutdown, however, threatens companies counting on efficient global trade. A resolution of the labor talks for the West Coast ports would buoy business far beyond the water’s edge.
Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.