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America’s Supply Line Has Officially Been Disrupted — And Most Of Us Don’t Even Know It

Image source: MPKelley.com

Image source: MPKelley.com

Hundreds of businesses across the United States and Canada could shut down and thousands of workers could lose jobs because of a seemingly trivial – but significant — labor dispute at West Coast ports.

It has turned the Pacific waters off of the West Coast into a parking lot for cargo ships and exposed how vulnerable America’s economy and supply lines are to disruption.

“A West Coast port shutdown would be an economic disaster,” Kelly Kolb, the vice president of government affairs for the Retail Industry Leaders Association, said in a press release. “A shutdown would not only impact the hundreds of thousands of jobs working directly in America’s transportation supply chain, but the reality is the entire economy would be impacted as exports sit on docks and imports sit in the harbor waiting for manufacturers to build products and retailers to stock shelves.”

The ports are not completely shut down yet, but the International Longshore and Warehouse Union, which represents workers at 29 ports on the West Coast, staged a deliberate slowdown over President’s Day weekend to show its power — and has halted work several days this month.

The Los Angeles Times reported that 33 ships were waiting in the ocean to dock at the ports of Los Angeles and Long Beach – the nation’s busiest. Another 55 ships are sitting at the dock waiting to be unloaded. Each ship is about three football fields long.

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Pictures by one photographer show hundreds of semitrailers sitting idle at LA-area ports. The trucks are used to move containers to trains, which distribute the goods throughout the US, Canada and Mexico. The same photographer also snapped pictures of ships backed off of Los Angeles, many of them piled high with cargo containers.

Strike Could Lead to Shortages

“The slowdown is already making life difficult, but a shutdown could derail the economy completely,” Kolb said. “For retailers specifically, a shutdown will have dire consequences for those dependent on spring inventory demand.”

That means the strike potentially could lead to empty shelves at stores throughout the US and Canada. More than 70 percent of America’s imports from Asia and half of US maritime trade moves through the West Coast ports, Reuters reported.

Factories that rely on parts from Japan and China and farmers who rely on food exports to Asia could be hard hit. Farmers in California could lose hundreds of millions of dollars if they cannot ship crops overseas.

Honda is already slowing production at its car factories in Ontario, Ohio and Indiana because it cannot get auto parts from Japan, Reuters reported. A full-scale strike and port shutdown could have even more catastrophic effects.

“A port shutdown of even a short duration could derail economic growth and cause long-lasting damage and job losses across the country,” said Kolb. “There needs to be a greater sense of urgency at the White House, before it’s too late.”

President Obama is so worried about the situation that he sent Labor Secretary Tom Perez to San Francisco to try and negotiate a contract between the union and the Pacific Maritime Association, which represents ship owners. Talks between the union and the association have dragged on for nine months because the two sides cannot agree on changes to an arbitration contract. Work at the ports was set to resume on Tuesday, although another slowdown or shutdown could place more cargo ships at sea – and further harm the US economy.

Do you believe this labor dispute could harm the economy? Share your thoughts in the section below:

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