As representatives of the International Longshore and Warehouse Union and Pacific Maritime Association negotiate a new labor contract to replace the one that expires July 1, shippers say they should be thinking about how to make the ports more productive over the long term.
“A good contract, in my view, would be one where West Coast ports start approaching world-class standards in terms of productivity and lifting,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition, during an American Shipper webinar in late April.
So far, shippers remain optimistic that a West Coast dock strike, like the one which occurred with devastating effect in 2002, will be avoided by the ILWU and PMA negotiators, though there may be slowdowns and work-to-rule disruptions. There is also a chance that negotiations may continue past the July 1 expiration, since rising healthcare costs and labor jurisdiction questions will be sticky issues.
Just in case of a West Coast dock meltdown, some shippers have already made contingency plans, but “none of them are great options,” Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, explained during the webinar.
While shippers can move their goods early into the West Coast, Gold said they will likely face higher storage and warehousing costs. If they route shipments through the East Coast as the contract expiration approaches, then they could be caught in a vessel capacity crunch. Air freight, another option, is 10-times more expensive than ocean transport.
The shipping industry is fortunate that there hasn’t been any acrimony displayed between the ILWU and PMA like that experienced in 2012 and 2013 during the East and Gulf coasts longshore negotiations between the International Longshoremen’s Association and U.S. Maritime Alliance.
Overall, shippers rightfully demand long-term improvements to U.S. dock operations via new technologies and process management. No one wants to see the country’s ports fall behind those now making productivity advances across Asia and Europe, and become a chokepoint for imports and exports.
From the perspective of the AgTC membership, Friedmann correctly warned “there is nothing we produce in this country, in agriculture or forest products, that cannot be sourced somewhere else in the world.”
This editorial was published in the June 2014 issue of American Shipper.
American shippers deserve productive container terminals
