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July 3, 2023

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July 3, 2023 | Journal of Commerce 13 www.joc.com Cover Story blamed for the widespread diversion of cargo — particularly imports from Asia — to ports on the East and Gulf coasts. Drawn-out contract negotia- tions marred by disruptions to port operations have consistently helped drive discretionary cargo away from the West Coast over the last 20 years, with the 2002 lockout sparking a shift that has accelerated in the last year. West Coast ports handled 56% of total US imports from Asia in the first five months of 2023, down from 71% in 2013, while ports on the East and Gulf coasts increased their combined share of the trans-Pacific Negotiators from both sides felt pres- sure to reach an agreement this week to prevent the negotiations from completely unraveling, DeNike said June 15 during the annual meeting of the Agriculture Transportation Coali- tion in Tacoma. "When [the negotiating process] is over with, you have a sinking feel- ing that you screwed up," he said. "When both sides feel that way, it's actually good." 'Deleveraging' China trade The coastwide talks between the ILWU and the PMA have been at conventional terminals failed, according to the sources. What's next? With a preliminary contract in place, the ILWU and PMA will now begin a lengthy — but normal — ratification process in which leaders from each organization discuss the details of the agreement with their respective memberships, who will then vote on the deal. Based on past contract cycles, ILWU locals and local employers will finalize so-called side contracts for their regions that do not require approval at the coastal level. The ILWU will then schedule a caucus with offi- cers of the locals to go over details of the coastwide agreement, after which the local officers will hold meetings in their regions to discuss the agreement with their membership. The process usually takes about three months, which would push ratification votes by the more than 20,000 rank-and-file ILWU mem- bers and the 70-member PMA into the early fall. Ed DeNike, president of SSA Containers, which operates a total of seven terminals in Long Beach, Oakland and Seattle, said he is "almost 100% certain" the ILWU and PMA will ratify the contract, in part because neither side feels particularly good about the details of the deal. US West Coast labor talks erode trans-Pacific market share Monthly percentage share of containerized US imports from Asia by coast TEU market share 40% 0% 10% 20% 30% 40% 50% 60% L L 2018 2020 2022 US West US East US Gulf US West 61.9% US West 61.9% US East 32.7% East 32 7% US Gulf 5.1% US Gulf 5.1% Jun, 20192 50% 50% Source: S&P Global © 2023 S&P Global The ILWU contract covers workers at 29 ports on the US West Coast, including Los Angeles, Long Beach (pictured), Oakland and Seattle-Tacoma. Port of Long Beach

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