Dive Brief:

• Twenty-one members of Congress signed a letter on Monday urging the presidents of the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) to reach an agreement to renew the labor contract, which expires July 2019.
• The legislators recalled the failed contract negotiations between 2014-2015 which provoked a stoppage of ports in the West Coast and cost the U.S. economy an estimated $7 billion, and a current labor dispute at the Port of Portland which has added to shipper costs and lead times.
• The two organizations announced late September they would begin new contract talks this week, in order to avoid extending talks beyond the contract expiry deadline. 

Dive Insight:

The exact cost of the port stoppage caused by the ILWU-PMA labor dispute is unknown, mainly because some businesses are still suffering through financial, legal and customer relationship repercussions.

Although purchasers are often understanding in cases of external short-term disruptions (inclement weather, accidents), the responsibility for ensuring proper delivery of product often falls upon the supplier or logistics provider, and frequent missed targets due to long-term or unpredictable disruptions (UPS 1997 strike, Hanjin's bankruptcy drama) can tarnish reputation for risk management. 

As a result, businesses are closely watching the contract negotiations and hoping a resolution is quickly reached. The contract is not set to expire until 2019, but if the two organizations haven't reached an agreement by 2018's budgeting season shippers may become nervous and begin searching for alternative options.