Economy Could Lose Billions in West Coast Port Shutdown, Study Says
June 30, 2014,
WASHINGTON-The U.S. economy could lose as much as $2.5 billion a day if a prolonged shutdown of West Coast container ports takes place, according to a study conducted jointly for the National Retail Federation and the National Association of Manufacturers by economists at the Interindustry Forecasting Project at the University of Maryland.
Negotiations for a new contract agreement, which would cover about 13,600 dockworkers at 30 ports stretching from San Diego to Bellingham, Wash., are taking place between the Pacific Maritime Association, representing the ports, and the International Longshore and Warehouse Union. The current agreement expires today.
According to the study, a five-day stoppage at the ports would reduce U.S. gross domestic product by $1.9 billion a day. A 10-day stoppage would slash GDP by $2.1 billion a day, and a 20-day stoppage would cut into GDP to the tune of $2.5 billion a day.
"It is important for the parties at the table as well as others to fully understand the economic consequences of a port disruption," said Matthew Shay, NRF's president and CEO. "Any supply-chain disruption, whether it's a port slowdown or outright stoppage, would cripple international trade, stymie supply chains and hurt domestic employment and consumer spending."