Market Matters Blog

West Coast Ports Suffering Slowdowns, Work Stoppages

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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Loaded containers heading west by rail along the northern corridor in early January. (DTN photo by Mary Kennedy)

OMAHA (DTN) -- The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) are still at odds over labor contracts, and the ongoing dispute is affecting service at several West Coast ports, according to trade sources.

A trade source told DTN via email that both sides are still blaming the other for the failure to reach an agreement. The source said the ports having the most problems are Oakland, Portland and Seattle/Tacoma. "LA/Long Beach is apparently better; Oakland is the worst and has been closed completely off and on."

The PMA stated on their website in December that, "ILWU slowdown tactics have reduced productivity at Pacific Northwest ports for more than a month and a half, with drop-offs of 30-40% now the norm, according to PMA analyses of terminal operations. Intermittent walk-offs have also occurred in Oakland. At the ports of Los Angeles and Long Beach, the nation's busiest, the ILWU restricted dispatching skilled crane operators to operate yard cranes, among the most important jobs to relieve congestion on the docks."

According to the PMA, the union actions are tied to the ongoing negotiations for a new coast-wide labor contract between container terminal operators and the ILWU. Negotiations began in May for the contract that expired July 1, and talks have been occurring almost constantly for the past six months. The contract being negotiated covers nearly 20,000 longshore workers at 29 West Coast ports.

In a press release on their website Jan. 15, the Federal Maritime Commission said that Chairman Mario Cordero announced to staff on Jan. 13 that his priority for the commission in 2015 is addressing congestion issues that are plaguing the nation's ports.

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Chairman Cordero stated, "Among the commission's statutory goals is the assurance of an efficient ocean transportation system. The efficient operation of the nation's ports is squarely within that mandate and paramount to the commission's responsibilities. As we move forward, I look forward to a thorough review of the issues and views that have been provided from various maritime industry stakeholders. The FMC will continue its role in protecting the shipping public and addressing unreasonable or unjust practices by carriers or marine terminal operators."

On Jan. 5, Allison Beck, acting director of the U.S. Federal Mediation and Conciliation Service (FMCS), issued the following statement on the FMCS website: "In response to a joint request for assistance from the parties, collective bargaining between ILWU and PMA representatives will continue as soon as possible under the auspices of the Federal Mediation and Conciliation Service (FMCS). We are prepared and ready to render prompt assistance. Deputy Director Scot Beckenbaugh, a senior FMCS mediator with extensive collective bargaining experience in this industry, has been assigned to help the parties bring these important negotiations to a mutually acceptable resolution."

The press release went on to say the FMCS will not release information regarding future meeting dates and locations. "In addition, the FMCS will have no further comment at this time regarding the status or substance of the negotiations."

Earlier this month, the BNSF said on their website that the marine terminal operators at the ports of Oakland, Los Angeles and Long Beach had advised BNSF of their intentions to limit marine terminal labor calls to support their marine terminal operations. A similar action had also been done at Pacific Northwest marine terminals.

"In anticipation of further slow-downs and marine terminal congestion," the BNSF said, "we are issuing an embargo to be effective Monday, Jan. 5, 2015, for westbound traffic received at interchange points destined for all marine terminals served on the West Coast. The embargo was lifted Jan. 7, but the BNSF continues to monitor the ongoing labor issues at the West Coast terminals and has stated that they are encouraged by the participation of the FMCS.

A container broker told DTN, "From what we hear, the main issue is maintenance of chassis. ILWU wants to have that job and income and work from it for their mechanics. The problem is that the shipping lines and terminals no longer own the chassis, so they have no say or legal right to give the maintenance to the ILWU. The contract is left to another union off the terminal site. It's a catch 22."

"We are doing some business, but we easily passed on over 2 million in sales over the past 60 days. Some of that is lost, but some may come back to us. A lockout or strike keeps being rumored."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

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