Are You Prepared for a Devastating Port Strike in 2008

Abstract

This article explores the historical background of the 2002 West Coast port strike in an attempt to identify potential issues and impacts if negotiations for the current contract renewal fail, and a strike ensues in 2008. Participants in the 2002 negotiations included the Pacific Maritime Authority (PMA), the International Longshore and Warehouse Union (ILWU) and the West Coast Waterfront Coalition (WCWC). A notable aspect of the 2002 strike was that the entire negotiation process extended over an eight-and-a-half month period and resulted in a total of 10 days of lockout, which cost the U.S. economy billions of dollars. By the time the contract was settled, the backlog of ships had grown to more than 100 days. One analysis examined the effect on stock prices of affected companies. They typically dropped around eight percent. Boeing warned that a lack of parts for airplanes in the process of being constructed could cost the state of Washington $30 million in tax revenues. Potential issues of contention include steps needed to increase throughput, normalizing the workforce through modified work rules and expanded use of technology such as RFID, GPS and optical character recognition (OCR). The author recommends frequent monitoring of negotiations, strategic inventory adjustments, government intervention and adjustments in elements of the supply chain.