U.S. ports and economy can’t afford a repeat of West Coast port slowdown, according to the heads of Commerce, the NRF and NAM.
The heads of three influential industry associations said a new partnership between organized labor and terminal management is necessary to prevent the damaging effects of future work slowdowns and repair the reputation of West Coast ports.
“Enough is enough. There are too many challenges facing the ports already to allow uncertainty from unpredictable labor negotiations every few years to become standard operating procedure. What we need is a path to ensure that our ports — and the United States — always remain ‘open for business,’” Thomas Donohue, the president of the U.S. Chamber of Commerce; Matthew Shay, president of the National Retail Federation; and Jay Timmons, president of the National Association of Manufacturers, said in commentary posted on CNBC.com.
On Feb. 20, the International Longshore and Warehouse Union and the Pacific Maritime Association reached a tentative agreement on a multi-year contract, ending months of acrimonious negotiations that led to tit-for-tat reductions in work levels and massive cargo backlogs at West Coast ports.
Businesses are still feeling the lingering effects from the labor standoff that crippled West Coast ports for several months, with many retailers lowering spring sales expectations because of delays in shipping merchandise from Asia. A big concern for local economies from the Pacific Northwest to Southern California is the perception that their ports have become unreliable. Many shippers were forced to reroute cargo to ports on the East Coast and the Gulf, or even Canada and Mexico and some resorted to more expensive air freight to receive critical orders in time.
Shippers also haven’t forgotten the 10-day lockout at West Coast ports in 2002, capacity problems in 2004 and recent congestion that pre-dates the dock labor situation.
“There must be an evaluation of how management and labor negotiate future labor contracts covering the nation’s ports. The parties must find a way to evolve their negotiations to address today’s global supply chains,” the three business leaders wrote. “Retailers, manufacturers and other businesses support collective bargaining when done properly. But the interests of two parties cannot be placed ahead of the millions of workers across the country whose jobs rely on efficient, reliable operation of the ports. If longtime adversaries such as Ford and the United Autoworkers can come together to build a stronger enterprise, port management and labor can do the same.”
The auto industry analogy is one that Labor Secretary Thomas Perez has also made in recent weeks since helping mediate a settlement of the labor dispute between longshoremen and their employers. Perez also said that labor unions and companies both win when they become business partners that collaborate on long-term planning.
The American Shipper feature, “Perils of deadline bargaining,” (March 2015, pp. 35-37) provides an in-depth analysis of how the ILWU, International Longshoremen’s Association on the East Coast and maritime employers can learn to effectively address issues between them without harming the shippers on which they depend.
Business leaders call for reform of dock labor negotiations
