Widened Panama Canal Poses ‘Existential Threat’ To ILWU

Image Credit: Miami Herald

The ILWU is the highest-paid union in America. However, with the expanded Panama Canal, its monopoly on the West Coast ports may soon change.

For decades, the International Longshore and Warehouse Union has been able to command the highest wages in the union movement.

“ILWU full-time workers receive an average of $175,000 in annual wages, along with a non-wage benefits package costing more than $110,000 per active worker per year,” reports the American Thinker’s Chriss Street.

However, the ILWU’s ability to command the highest union wages in the nation may soon be changing due to the expansion of the Panama Canal.

[T]he April 2016 opening of the widened Panama Canal has created the first existential threat to the ILWU’s monopoly on handling 80 percent of Asian freight. The $5.25 billion decade-long project increased maximum transit capacity by over 2.5 times, from 5,000 container “Panamax” ships to 13,000 container “Neopanamax” vessels.

The widened Canal is changing U.S. freight patterns on both coasts and within the United States. Shippers pay about $420 to load or unload containers at the ILWU controlled Port of LA, versus $240 at Atlantic Coast ports including Savanah, Charleston and New York City. Plus the $2.50 per mile cost of shipping containers by double-stacked trains across the U.S., versus $0.80 per nautical mile to ship a container on oceangoing ships.

That means Asian shipping costs per container to the East Coast is now about $2,000 to $3,000 cheaper using Neopanamax ships transiting the Panama Canal, versus unloading at the Port of LA, trucking to a railhead, and then delivering by train.

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