Market Matters Blog

West Coast Port Tension Still Simmering

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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Containers loaded on rail cars heading for export. (DTN photo by Elaine Shein)

OMAHA (DTN) -- It's been one month since the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) tentatively agreed on a new five-year contract, covering workers at all 29 West Coast ports. The next step will be taken sometime during the week of March 30 when a caucus of 90 union delegates will decide to recommend it for consideration by the full membership. Then, every union member will receive a copy of the tentative agreement for discussion at their local union meeting. After that, a vote to ratify (or not) is then taken by secret ballot sometime during April.

There has been talk circulating that the ILWU Local 10 in Oakland is expected to vote against the contract. Evidence of this mounted when, on March 11, the Port of Oakland said on their website, "Oakland International Container Terminal has suspended yard and gate operations for the remainder of the day shift March 11. The terminal said that it has dismissed longshore workers after they refused to work due to a dispute over staffing levels." On March 11, the PMA issued a statement saying that "ILWU Local 10 has repeatedly engaged in illegal work stoppages at the Port of Oakland, bringing operations to a standstill at Oakland International Container Terminal, the largest terminal in the Port." The terminal was reopened for business on March 12. Here is the link to the PMA press release on March 11: http://goo.gl/…

The Port of Oakland also had problems with workers shortly after the tentative contract had been negotiated. On Feb. 22, the port experienced some labor issues with the day shift, resulting in the suspension of those workers. The port's website said while work resumed at the Port of Oakland the evening of Saturday, Feb. 21, it continued Sunday morning, but then was suspended for the remainder of the day shift. The website said that "The issue is a labor-management dispute over break time." The PMA released a statement on Feb. 22 saying they "will continue to address any future work stoppages by Local 10 through the grievance and arbitration process, and, if necessary, in court." Here is a link to the full PMA press release on Feb. 22: http://goo.gl/…

The Port of Portland is not without its problems either. The International Container Terminal Services, Inc. (ICTSI), which operates at Terminal 6 and the ILWU, still have "bad blood" between them, according to a comment made by Port Executive Director Bill Wyatt to the Oregonian in February. And with the departure of Hanjin shipping from the port in March, the port is concerned that the ICTSI could follow, although Wyatt doesn't feel it will come to that and said that ICTSI is working to entice new business to the Port. Still, relations between both parties have been tense for some time and are one of the reasons said to have driven Hanjin out of Portland.

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The Oregonian reported on March 10 that "a federal judge ordered the national longshoremen union and its Portland chapter to pay nearly $60,000 to the National Labor Relations Board for violating a court order to resume normal operations at the Port of Portland's Terminal 6." In December 2014, the ILWU was found guilty of work slowdowns at the container terminal that went on for more than a year. In July of 2012, U.S. District Judge Michael Simon extended an order banning slowdowns by ILWU and required longshoremen to comply with his order. At that time, Hanjin was staying away from Portland because of the work disruptions. Finally, in 2015, the company decided enough was enough and on March 9, left Portland for good.

TIME FOR A CHANGE?

There seems to be a consensus forming among shippers that Congress should get involved to ensure that U.S. ports don't go through costly slowdowns every time a labor contract comes up for renewal. Many exporters would like to see Congress remove U.S. ports from under the governing body of the National Labor Relations Act (NRLA). At issue is that the NLRA allows for work and labor slowdowns, which has happened during contract negotiations. Exporters would like to see the U.S. ports have a new "boss": the Railway Labor Act (RLA), which currently governs airlines and railroads. The general purpose of the RLA is "to avoid any interruption to commerce or to the operation of any carrier engaged therein" and to "provide for the prompt and orderly settlement of all disputes concerning rates of pay, rules, or working conditions," among other things. Here is the link to the full text of the RLA: http://railwaylaboract.com/…

Mike Hajny, vice president of Wesco International, Inc. Ellensburg, Washington, told DTN in an email that he agrees that ports should be subject to the Railway Labor Act. He said, "While the ILWU should continue to be free to negotiate whatever labor contract they feel is justified, they should never again be permitted to shut down our ports. They need to be subject to the Railway Labor Act -- and 2015 should be the last time that we ever have to suffer through an ILWU port shut-down again."

Hajny told DTN that Wesco has been exporting hay since 1971, and together with the farmers, vendors, and suppliers they work with, have faced many challenges over the years. "Whether it's untimely rain at harvest time, or drought, or sudden changes in exchange rates or oil prices, we're used to the ups and downs of agriculture in the international marketplace. What we're not used to, however, and what we have no way to prepare for or defend against is the devastating harm caused when the ILWU holds our access to international transportation hostage in their periodic contract negotiations with the PMA."

"In terms of gross sales lost during the 11/1/14-2/23/15 ILWU slowdown, Wesco's sales were down $6,500,000 when compared to the same period the previous year." Hajny said. "But the real, personal toll of the slowdown came in the paychecks of our 65 employees who had their overtime eliminated just as they were going into the Christmas season. Real working people lost wages, real farmers lost the full value of their harvest, and thousands upon thousands of eastern Washington families had to worry about their financial futures, while a couple hundred cynical ILWU members in Seattle and Tacoma played chicken with the PMA over their $140,000-plus salaries, $80,000 pensions, and who was going to pay the payroll taxes on their $35,000-a-year Cadillac medical insurance policies."

Hajny added, "We really, really need the help of our local and federal legislators to protect the economy of eastern Washington and the livelihoods of so many people by making it impossible for the public infrastructure of the ports of Seattle and Tacoma to be hijacked by the narrow, self-serving interests of such a small group of people."

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

Follow Mary Kennedy on Twitter @MaryCKenn

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