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West Coast Port Labor Talks Shine Light on Supply Chain Woes

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In 2021, the news was full of stories on supply chain issues. Ports were tasked with handling traffic almost one-third heavier than in previous years while missing more than one-fourth of its work force.

This combination of factors saw dozens of giant shipping vessels waiting offshore, some with perishable goods, at the beginning of 2022. Now, even as some of these supply constraints are easing, new talks between the longshoremen and warehouse employees and their employers are placing added pressure on a shipping industry already badly strained.

A new piece from the Wall Street Journal spells out the risks posed by these negotiations and how they dovetail with the record inflation facing the United States. Negotiations in 2014 coincided with shipping delays, lost revenue, and even accusations of workers intentionally slowing productivity—and with 40-year highs for inflation, the situation could not be more fraught.

The Drill Down has examined the root causes of inflation before, and while the Biden Administration is seen as being friendly towards labor, these talks could complicate the President’s economic agenda. If talks escalate, the risk of strike increases, but if past negotiations reveal anything it is that negotiations need not reach such a high pitch to cost millions in revenue to businesses.

In a vacuum, that would be risky enough, but with the midterm elections now only months away, and the expectation of the port labor discussions lasting until year’s end, President Biden may feel pressured to wade into the negotiations. The political upside could reinforce his pro-labor credentials with Democrats, but if his efforts are seen as prolonging the fight, Republicans can counter by casting Biden as anti-productive and overreaching.

Forty percent of all maritime imports enter the U.S. through the ports that are involved in these negotiations. Despite optimism that a deal will be reached, the immense amount of trade that hinges on these talks casts a long shadow over the negotiations.