Economy
ILWU Contract Negotiations Continue
Written by Sandy Williams
June 24, 2014
ILWU/PMA contract negotiations are continuing on the West Coast. Armada Corporate Intelligence calls the negotiations “eerily silent” and says whether a strike will occur is unclear. The contract for the ILWU is set to expire June 30.
According to Armada, the Pacific Maritime Association (PMA) is facing increased competition from the Panama Canal expansion. Enlarging the canal will allow mega container and bulk ships to pass through the Panama Canal creating competition for West Coast ports.
The International Longshore and Warehouse Union (ILWU) wants to increase wages for workers but the PMA needs to keep labor and operating costs down in order to stay competitive against Gulf and East Coast ports.
A 2002 ILWU lockout lasted 10 days and caused more than four weeks of backlogs.*
July inventory volumes were moved into the US in June by shippers worried about the potential strike. Armada said inventories are now higher than normal and may cause July economic data to be skewed lower.
Supply chains are shifting to ports in Canada and Mexico, says Armada, which may create short term capacity shortages as well as higher transportation costs.
Armada does not anticipate a long work stoppage—if one occurs at all. A strike would be a blow to the California economy and may have already caused damaged due to the changes in shipping patterns.
The impact of a strike could be significant. “In 2002 dollars, the strike then cost the US economy about $55 billion in productivity losses,” says Armada.
The SMU Steel Summit Conference, Sept 3 & 4, in Atlanta will feature Dr. Chris Kuehl, managing director of Armada Corporate Intelligence and chief editor and a primary writer for Business Intelligence Briefs. Dr. Kuehl will speak on global economics and current and potential risks for companies associated with the steel industry.
(*Note: SMU previously wrote that a “strike” occurred in 2002 but it was actually a lockout–the article has been corrected above.)
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
Architecture firms struggle through April
For the third month in a row, architecture firms reported a reduction in billings through April, according to the latest Architecture Billings Index release.
House committee blocks GOP budget proposal
The budget proposal has big implications for steel and manufacturing.
Manufacturing in New York state contracts again in May
Manufacturing activity in New York state declined for the third consecutive month, according to the May Empire State Manufacturing Survey from the Federal Reserve Bank of New York. Responding firms continue to forecast weaker business conditions in the coming months.
Chicago Business Barometer falls back in April, remains in contraction
The Chicago Business Barometer declined in April, reversing March’s gains, according to Market News International (MNI) and the Institute for Supply Management (ISM).
Fewer manufacturers optimistic about the economy
PMA’s April report shows that only 16% of surveyed manufacturers anticipate an increase in economic activity in the next three months (down from 23% in March)