Risk Center

Port disruptions highlight uncertain state of cargo transport in the U.S.

Despite beginning talks in May of 2022, the ILWU and PMA seem farther than ever from reaching an agreement. Workers affiliated with the ILWU have undergone two walkouts at the Port of Oakland since the beginning of November, moves that are widely regarded as tactics to put pressure on the PMA to make progress in the negotiations.

There have been few examples of open hostility between the two sides, which has limited the Federal Government’s ability to intervene and mediate an agreement. The October break in negotiations will likely extend talks by several months.

Despite increased congestion, shippers are favoring East and Gulf Coast alternatives rather than risk the uncertainty of West Coast ports. As ocean cargo volumes have fallen on most routes due to inflationary pressures, spot prices have significantly decreased leading carriers to employ measures to stabilize prices. Carriers have removed vessels from service and decreased route frequencies to balance supply and demand.

Rail cargo movements have been threatened by a major strike involving Class-I railways and workers. The sector narrowly avoided a strike in the summer and has since been embroiled in a federally mediated negotiation. The mediation process delivered several promising agreements, only to see them rejected by a handful of unions. The most recent proposal has already been rejected by three of the twelve unions, intensifying fears that a nationwide rail strike could take place as soon as December 4.

Waiting time trends 

West Coast ports saw a return to increased congestion levels after weeks of a downward trend. This was driven by sharp increases in waiting times at the ports of Vancouver, Prince Rupert, Oakland, and Seattle. Despite falling cargo volumes to West Coast ports overall, labor actions at the ports of Oakland and Seattle have decreased productivity and led some carriers to divert volumes to Canadian ports on the West Coast.

Congestion levels continue to trend downwards on the East Coast. The decreases are likely the result of lower volumes as shipping levels decline after peak holiday shipping and face muted consumer demand overall. Gulf Coast congestion improved slightly; however, many ports remain inundated with backlogs and elevated congestion.

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