U.S. Labor and Commerce Secretaries, along with Los Angeles mayor, met with ILWU and PMA negotiators.
Government officials stepped up pressure on the International Longshore and Warehouse Union and Pacific Maritime Association to wrap up contract negotiations as reports from shippers being harmed by slowdowns at West Coast ports continued to roll in.
Labor Secretary Thomas Perez, who came to San Francisco on Tuesday to encourage a resolution, was joined on Wednesday by Commerce Secretary Penny Pritzker and Los Angeles Mayor Eric Garcetti for meetings with the ILWU and PMA.
A Department of Labor official said of the meetings, “The dispute continues to impact U.S. businesses and workers who are reliant on global supply chains. Secretaries Perez and Pritzker stressed the importance of reaching an immediate agreement before the dispute causes further economic damage.”
“Global trade is vital to the strength of the U.S. economy, with exports of U.S. goods and services reaching a record $2.35 trillion in 2014 and supporting 11.3 million American jobs,” the official added. “The administration will continue to work with both parties, in addition to business leaders, workers and elected officials as talks continue.”
A letter to PMA members from James McKenna, the employer group’s chief executive officer, that is being circulated at some terminals characterizes an offer made to the ILWU on Feb. 12 as the PMA’s “last, best, and final offer.”
The offer includes a $1 per hour increase in pay during each of the five years of the agreement, a increase in pensions, maintenance of free in-network health care, and expansion of chassis maintenance jurisdiction.
According to the letter, there will be a “mandatory 8-point roadability inspection program” for all chassis, except where work is done by others grandfathered in under a past contract or for chassis that are owned by independent truck drivers or trucking companies in Los Angeles, Long Beach, Oakland, Seattle, Tacoma and Portland.
Meanwhile, shippers continue to report how the slowdown at West Coast ports is affecting their businesses.
Mark Schweitzer, managing director of international and intermodal freight at Archer Daniels Midland Co. said that his company has adjusted shipments to move the vast majority of its products through East Coast ports such as Norfolk, New York, Savannah and Charleston in recent weeks.
In the past, about half of the company’s cargo was moving through the West Coast.
Schweitzer said ADM made the switch in January after seeing slowdowns and difficulty getting space on vessels.
“In late December there was a hint of a slowdown, and so we started looking real close at our numbers and our supply chains, trying to figure out if there were holes and slowdowns in it,” he explained. “We started pushing stuff to the East Coast back in the first days of January this year.”
In 2012, ADM opened a large new intermodal yard and inland port, adjacent to its manufacturing complex in Decatur, that has connections to the Norfolk Southern, CSX and Canadian National railroads.
This proved to be farsighted strategy, as the company was able to divert shipments that would normally move to customers in Asia through West Coast Ports through the East Coast, using Norfolk Southern’s railway.
Schweitzer noted that the ocean carriers it uses call both the U.S. East and West Coast.
ADM did not disclose its volumes through the Decatur facility, but the company is such a large shipper, it is able to attract daily intermodal service.
Schweitzer added that several of ADM’s neighbors in central Illinois are also using the facility, moving about 200 40-foot containers through the inland port.
A very different kind of shipper, the apparel maker Perry Ellis, this week reported preliminary 2014 financial results and said West Coast port disruption had a negative $23 million impact on revenues in the fourth quarter and fiscal year ending Jan. 31.
Port disruption “caused shipments, originally intended for the fourth quarter to be received too late or post year end, thereby impacting sales,” the clothing company said.
Oscar Feldenkreis, president of Perry Ellis, said “like companies across industries, we are taking action to overcome the challenges presented by the West Coast ports situation. We have expanded our East Coast logistics pipeline in an effort to improve receipts and the delivery of goods to our retail partners.”
Auto manufacturer Honda will cut back production at several plants in Ohio, Indiana and Ontario, and Toyota’s North American plants are also making changes because of shipment delays, according to an article in Automotive News.
The Agriculture Transportation Coaltion said a group of 507 California agriculture and forest products companies and organizations delivered a letter to the California Congressional Delegation saying the ongoing West Coast port labor dispute is having a “devastating impact on our livelihoods and the rural communities we support.”
Over 600 farmers and agriculture interests in Oregon and Washington delivered similar letters to their Congressional delegations.
The Port of Oakland said that its operations were halted Thursday as longshore workers took the day off for a union meeting. “That means no gate, yard or vessel work on the 8 a.m. to 5 p.m. shift,” the port said. Vessel operations will stop on the evening shift as well, under a month-old suspension of nighttime activity by terminal operators.
The decision not to work comes in the ninth month of contract negotiations between dockworkers and terminal operators at 29 West Coast ports. Full operations are expected to resume at the Port Friday, Feb. 20.
Government steps up pressure for West Coast port labor settlement
