Biden urged to help clinch West Coast dockworkers agreement, as companies fear mounting supply chain issues

07 Jul 2022 --- More than 150 business associations are calling on US President Joe Biden’s administration to extend current contracts for 22,000 dockworkers at West Coast ports as companies fear a strike may exacerbate supply chain problems. 

The tension stems from the fact that last Friday, the contract between dockworkers and shipping companies at the West Coast expired. As a consequence, the “no strike” clause has also expired. 

“It is still crucially urgent for an agreement to be reached as soon as possible to prevent further supply chain disruptions,” Michael McGuffin, president of the American Herbal Products Association (AHPA), tells NutritionInsight.

The International Longshore and Warehouse Union (ILWU) is the union representing Pacific dockworkers, and the Pacific Maritime Association (PMA) is a trade group for cargo carriers and terminal operators. Currently, dockworkers continue to work despite the contract’s expiration; however, companies fear the consequences of not reaching an agreement as soon as possible.

The negotiations concern 29 ports in Washington, California and Oregon that together handle nearly 40% of all US imports.Situation could get worse
Industry is grappling with an onslaught of supply chain issues amid rising inflation. Companies are observing months-long delays in their shipments, struggling to secure ingredients and find freight transport. 

“The dietary supplement and herbal products industries are among the many sectors vitally dependent on cargo effectively moving through West Coast ports. Though both the ILWU and the PMA have agreed to continue operations and keep cargo moving beyond the expiration of the previous labor contract, these key ports have already struggled with congestion that would only worsen if the negotiating parties do not come to an agreement,” McGuffin explains.

The letter to President Biden, signed by organizations representing a range of industries, including nutrition, urges the administration to extend the current contract until a final contract is reached; commit to remain at the negotiating table and negotiate in good faith; and agree to not engage in any kind of activity that leads to further disruption at the ports.

“Labor shortages, freight delays, still-rising inflation, and mounting demand for limited resources have strained the herbal trade from sourcing to sale. Since the COVID-19 pandemic hit, it has become more expensive and takes longer to produce and deliver the safe, high-quality dietary supplements and herbal products that consumers want,” McGuffin adds.

“Further stress”
Indicating the severity of the situation, Biden met with the parties last month to discuss the negotiations. A joint statement was later issued underscoring cargo operations would continue beyond the contract expiration and that neither party is preparing for a strike or lockout. 

“We know there are significant issues for both parties that need to be worked out during this contract negotiation,” the signed letter specifies. “Even with the recent joint statement, supply chain stakeholders remain concerned about the potential for disruption, especially without a contract or an extension in place. Unfortunately, this concern stems from a long history of disruptions during previous negotiations.

“As we enter the all-important peak shipping season, we continue to expect cargo flows to remain at all-time highs, putting further stress on the supply chain and increasing inflation. Many expect these challenges to continue through the rest of the year.”Both sides understand the strategic importance of finding a solution.

Do whatever it takes?
One point of contention in the negotiations is the degree of automation at ports. Operators say more automation will bring more jobs by processing more cargo. Meanwhile, dock workers argue automation will decrease the number of workers, with both parties issuing studies to further their point. 

Companies however, want the matter resolved as soon as possible, as fears of the implications in the face of the mounting industry challenges are accentuating.

“We know the administration understands the economic significance of these negotiations. As such, we encourage the administration to provide any and all support to the parties to reach a final conclusion in their negotiations. We believe an immediate extension of the current contract is just as important and will provide assurance to the millions of businesses, workers and consumers who rely on the West Coast ports.”

Representing nutrition interests, the AHPA and Natural Products Association (NPA) were among the letter’s signatories. Nonetheless, the Council for Responsible Nutrition (CRN) was not. 

Asked why, Steve Mister, CEO and President of the CRN, says: “Our mission prioritizes those issues uniquely impacting dietary supplements and functional food. While we appreciate the uncertainties created by the broader West Coast port labor negotiations, it is not within the scope of our current priorities.”

By Andria Kades