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West Coast dock worker contract set to expire as labor talks continue

Yahoo Finance's Dani Romero gives an update on contract negotiations for dockworkers at 30 West Coast ports.

Video Transcript

AKIKO FUJITA: Well, the contract covering more than 22,000 workers at 30 US West Coast ports expires today.

BRIAN CHEUNG: And it's dialing up concerns that labor disruptions could snag the nation's fragile supply chain. For more on this, let's bring in Yahoo Finance's Dani Romero with the latest. Dani, give us the update on what you're hearing about these port negotiations. Today was the deadline, was it not?

DANI ROMERO: Yeah, today was. So there is no deal as of today, as of right now. But it's still unclear how long these negotiation talks will really last. But one thing is for sure, is that the unionized dock workers, as well as the shipping operators, they have said before that they wouldn't reach an agreement by today. But they also reaffirmed that they would not likely have a strike or a lockout.

Here's a statement that they sent us earlier this month-- excuse me-- that says, parties remain focused on and committed to reaching an agreement. But the stakes are really high here, as the future of the global supply chain really relies on this new contract that they've just started back on May 10. But the other thing is, is that last November, unionized dockworkers rejected PMA's offer to extend their current contract until July of next year.

But there is a possibility that they could agree on a short-term extension, which would preserve their no stoppage clause in their contract to allow them to continue to negotiate. But the executive director of the Port of Los Angeles has said that he doesn't-- he's not expecting a strike or a lockout at this point.

But the timing is really, really key here. July and August are-- is a month for retailers to stock up on back to school supplies, as well as home holiday goods. But some experts say that if this continues to drag on, the supply chain could become stagnant. And they would have to redirect some of this stuff. But it wouldn't cause a complete stop either.

BRIAN CHEUNG: Is there anything that is immediately kind of going to follow the fact that the deadline was technically today? I mean, they're still going to continue to work when the ports reopen next week. I guess, is there a concern that the workers could maybe passive aggressively just kind of work slower or, like-- I mean, 'cause that's happened in the past.

AKIKO FUJITA: And while the executive director may say that he doesn't expect a strike, I mean, if you look at the past, that doesn't necessarily set a good precedent, right? I mean, we have seen stoppages before.

DANI ROMERO: Yeah, we have, like you said, in the past. But, you know, obviously, they're trying to not have-- issue some form of panic. But also, again, like you said, these workers really have a lot of leverage when it comes to making these negotiations. But the biggest debate that will be on the table is automation.

And, you know, unionized dockworkers have said that automation really eliminates jobs, also creates some cybersecurity risks to port operations. And so that will really be-- and do little to-- for efficiency. So that will really be on the table right now. But yeah, it's a big debate right now going back and forth. So we'll have to see what happens.

BRIAN CHEUNG: All right, Yahoo Finance's Dani Romero, thanks so much.