WASHINGTON — The protracted West Coast port dispute is coming under more scrutiny from Congress and the White House as retailers continue to ratchet up pressure for a breakthrough to the impasse that has already caused significant delays and a financial blow to many companies.
A temporary suspension of loading and unloading containers at the ports over the weekend only added to the delays up and down the West Coast. Although port operations had resumed by Monday, according to industry officials, a new contract remained elusive between the Pacific Maritime Association and International Longshore and Warehouse Union.
Treasury Secretary Jack Lew, appearing on CNBC’s “Squawk Box” on Monday, said the White House is closely monitoring the West Coast port situation.
“There are a lot of people who are looking at this carefully,” Lew said. “I think that, up until this last week, we were seeing shippers finding alternate paths through. There were delays, but I think it’s important this get resolved and the sooner the better.”
Lew made the comments as a Congressional subcommittee was preparing to hold a hearing titled “Keeping Goods Moving,” on Tuesday morning.
Sen. Deb Fischer (R., Nebraska), who chairs the Senate Commerce Committee’s subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security, said the hearing will focus on the U.S. supply chain, particularly the “importance of efficiently functioning U.S. ports.” It will also consider the economic and logistical impact of port delays, congestion and outdated or inadequate infrastructure.
Kelly Kolb, vice president of government affairs for the Retail Industry Leaders Association, said, “I think the attention here inside the Beltway is growing. People are understanding the major impact it is having, and if we don’t have an agreement, just how much worse it will get.”
Kolb said Fischer has been listening to her constituency and growing concerns at the West Coast ports and “taking what she heard at [a hearing last week] to put more of a focus on the issue” at Tuesday’s hearing.
While terminal operators were suspended from moving containers on or off vessels on Saturday and Sunday, terminals at several of the ports, including the nation’s busiest in Long Beach and Los Angeles, were open to handle other business over the weekend, like processing cargo to load on trucks and trains, according to the PMA. It added that work resumed Monday morning for loading and unloading vessels. It declined to say whether it plans to suspend operations again if a new contract isn’t finalized.
A representative for the Port of Los Angeles said that, as of Monday morning, 16 container ships and another seven vessels waited to enter Long Beach and Los Angeles. With no major disruptions over the weekend, the L.A. port managed to clear cargo from the docks.
A spokesman for the union that represents 20,000 dockworkers said Monday that talks to resolve the remaining issues between the two sides are ongoing.
Jonathan Gold, vice president for supply chain at the National Retail Federation, was on Capitol Hill Monday, meeting with lawmakers in advance of today’s hearing.
“The message I am giving them is this is having an impact on everyone who relies on the ports,” Gold said. “It’s been nine months now and we are seeing significant slowdowns. They have got to come to an agreement, get a deal done and get the ports working again and commerce flowing.”
Meanwhile, retailers must wait and see what transpires between the two sides in the negotiations.
“It is a fluid situation,” Gold said. “We are not sure what is going to happen and the unpredictability is really having an impact. We are playing this waiting game to see whether or not the ports are going to shut down or if there is going to be a final contract.”
Matthew Shay, president and chief executive officer of the NRF, also appearing on CNBC’s “Squawk Box” on Monday, painted a bleak picture of the scope of the delays and the economic impact of a potential shutdown.
“This is 29 ports from San Diego all the way to Bellingham, Washington — 42 percent of all containerized trade, 12 percent of gross domestic product and 18 million jobs and it’s starting to have an effect,” Shay said. “The port operators are saying it is close to catastrophic, and the last time they said that there was a shutdown for 10 days in 2002 and that cost the economy $1 billion a day. Our study estimates if that happened today it would be $2.5 billion a day.”
Shay said 15 ships are sitting offshore in Oakland.
“We certainly don’t want to take a position on the negotiating issues between the two parties. We encourage them to continue with the existing contract, stay at the table and keep normal operations in place and avoid the slowdown,” Shay said. “It usually takes a few days to unload a container, and now it’s taking weeks — it is a really serious issue and a significant part of the economy.”