LOS ANGELES – Two unrelated labor disputes on the West Coast are causing concern for numerous businesses, as steelworkers at refineries go on strike and union members threaten to do so.
A breakdown in contract negotiations between labor and management at America’s West Coast ports is threatening to turn a slowdown into a full-scale strike, and an economic headache into a full-blown strike that could spread, causing with trickle-down effects nationwide. This week, talks between the Pacific Maritime Association (PMA) representing port management, and the International Longshore and Warehouse Union (ILWU) officially broke down and, without an agreement, experts have suggested that nearly 30 West Coast ports could be shut down within a week.
A work slowdown during contract negotiations over the past seven months has already created logistic nightmares for American exporters, manufacturers and retailers. A complete shutdown would be catastrophic, with hundreds of thousands of jobs at risk if the supply chain grinds to a halt, according to a statement released on Thursday by the Retail Industry Leaders Association. The last prolonged port shutdown of the West Coast ports was the 10-day lockout in 2002, which was estimated to cost the U.S. economy close to $1 billion a day.
At the same time, a West Coast refinery workers' strike has led to increases in rack prices for suppliers including Tesoro, Valero, Shell, Phillips 66, Chevron, Texaco and Petrodiamond. On Monday, Tesoro increased its rack price for gasoline and diesel by 10 to 12 cents per gallon at its terminals in Los Angeles and the San Francisco Bay Area, according to OPIS reports, and many other suppliers are doing the same, with increases ranging from 3.5 cents to 16 cents.
According to news reports, about 4,000 workers at nine plants — including seven refineries accounting for 10% of U.S. refining capacity — continue to walk picket lines in California, Kentucky and Texas. Late on Wednesday, the fourth day of the strike, a new offer was made to the United Steelworkers Union (USW) by lead oil company negotiator Royal Dutch Shell Plc.