The West in Want of Workers: Oakland's Port Labor Shortage & The Supply Chain

West Coast ports are starting to improve congestion issues, but Oakland faces a potentially disastrous labor shortage that threatens to slow progress. A halt on hiring during last year’s contract negotiations has left the port short of hundreds of workers. The shortage poses risks to the peak-shipping season, as new employees take time to hire and train.c

Oakland’s Labor Dilemma

Oakland has seen a rise in container volumes starting in March as shippers began moving back to West Coast ports. However, without enough dockworkers to unload ships, freight is not being unloaded fast enough. Small businesses around the Bay Area have expressed their concern over the matter, as delayed or stagnant cargo means there isn’t enough business to keep operations going. Some businesses had to consider rotating layoffs as lack of containers to move translated to reduced income.

Trucker shortages are exacerbating congestion as drivers up and down the coast continue to fight for rights and benefits, vying to be considered employees rather than independent contractors. Congestion and increasing costs limit the number of hauls truckers and other operators can make, keeping the earning potential of employees low and tensions high.

These low wages have discouraged replacement dockhands from suiting up and are affecting the Port of Oakland’s ability to hire enough laborers to make up for those lose during the hiring hiatus.

Impact on Supply Chain

The effects of the labor shortage are beginning to become visible at the Port of Oakland as ships are being forced to remain at anchor for up to 36 hours before being unloaded. In their last advisory on July 1 of this year companies stated that the average number of container vessel work gangs dispatched across the port ranged from 11 to 12 as opposed to the usual 20 gangs.

Shipping companies are already beginning to make efforts to avoid the congestion at the port. The G6 alliance, a group of large shipping companies, has already removed an Oakland line within its trans-Pacific services until the end of July due to vessel delays.

Though Labor unions agreed on a new contract for nearly 20,000 dockworkers on the west coast, analysts see the negotiation process as broken and the primary cause of the labor shortage. Despite governmental efforts to fix the issue, contract negotiations held up employment efforts, exacerbating port traffic. So, while West Coast ports deal with post-strike congestion, Oakland may see even more problems. Shippers with high-priority goods that need to be shipped quickly will be unlikely to risk losing money, and ship to more profitable, congestion-free East and Gulf Coast ports.. Despite governmental efforts to fix the issue, contract negotiations coupled with a foundation of distrust have extended the problem for months. So, while West Coast ports deal with post-strike congestion, Oakland may see even more problems. Shippers with high-priority goods that need to be shipped quickly will be unlikely to risk losing money, and ship to more profitable, congestion-free East and Gulf Coast ports.

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