Why The Western Ports Deal Is Important For The U.S. Supply Chain

Following months of negotiations and work disruptions, the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association, which represents 29 ports, have reached an agreement that will last six years if ratified by rank-and-file employees, ocean shipping firms, and terminal operators.

According to a study by Inforum Economics released by the National Association of Manufacturers last summer, the agreement is important because even a 15-day disruption in operations would cost the U.S. economy nearly half a billion dollars a day — for a total of $7.5 billion — and destroy 41,000 jobs, including more than 6,100 manufacturing jobs. Read that report here.

CNBC said, “The tentative agreement was a welcome development after weeks of escalating tensions between workers and port management, resulting in delays in vessel servicing, congestion at ports, in containers and out to trucking, as well as some port shutdowns.”

However, the proposed labor deal is a far way from being fully approved, CNBC noted. The next step is for the ILWU to follow ratification procedures that start with a contract caucus that convenes delegates from its 29 locals up and down the west coast.

Stay tuned to Connecting the Dots for developments. CNBC has more on the deal and next steps here.