Parties Dispute Port Cargo Delays

This story appears in the Nov. 17 print edition of Transport Topics.

Reports of further cargo slowdowns throughout West Coast ports cast new doubt last week on the direction of union contract negotiations that have dragged on for more than six months without a resolution.

While the Pacific Maritime Association and the International Longshore and Warehouse Union fenced privately and publicly over slowdowns and port congestion, 105 groups that asked the White House for a federal mediator signaled their growing nervousness about the situation.

Robyn Boerstling, director of transportation and infrastructure policy for the National Association of Manufacturers, on Nov. 12 said talks “are quickly deteriorating without a clear solution and manufacturers are growing increasingly concerned about both domestic and global impacts of a possible shutdown.”

NAM, which signed the mediation request letter, estimates that a 10-day port shutdown would cause $21.2 billion in damage to the U.S. economy. That scope of damage last occurred in 2002, when a 10-day lockout wasn’t resolved until President George W. Bush ordered West Coast ports to reopen.

Earlier this month, PMA charged that the union slowed cargo in Seattle and Tacoma, Washington, as well as Southern California by refusing to provide enough workers.

Last week, the union fired back.

“The ILWU is not responsible for the current congestion crisis at West Coast ports,” the union’s Nov. 10 statement said, citing chassis issues, rail delays, a shortage of port truckers, cargo volume increases and the use of larger vessels that strain the landside cargo handling network.

“The numerous, non-labor-related causes of the congestion problem up and down the West Coast are well-documented,” said ILWU spokesman Craig Merrilees, who added the PMA’s slowdown allegations raised the issue of “deceitful media tactics and the corrosive impact of such tactics” during negotiations.

Despite the wrangling, talks that began May 12 continued last week. Until management criticized the union, there was no public discord. The six-year contract between the parties expired June 30.

PMA is “deeply concerned about the operational situation at the major ports,” spokesman Wade Gates said.

In a separate development, six West Coast U.S. senators and six California members of the House of Representatives last week urged the parties to forge a deal.

“It certainly doesn’t seem that negotiations are going as well as we hoped,” Kelly Kolb, a vice president at the Retail Industry Leaders Association, told Transport Topics on Nov. 13. “From an outsider’s perspective, it certainly appears that the negotiations are becoming contentious.”

Kolb, whose group also signed the letter to President Obama, said that RILA members who rely on West Coast ports continue to have limited alternatives as cargo stacks up, such as using more expensive airfreight or diverting cargo to Mexico or Canada.

In an investor note, analyst John Larkin at Stifel Nicolaus said “domestic freight rates [as well as trans-Pacific airfreight rates near term] should increase with congestion-driven supply shortages, benefiting providers of logistics services and expedited delivery, while retailers and consumers should bear the burden of these higher costs.”

He also said he anticipates those conditions will extend into next year.

At TT’s press time, the White House hadn’t responded to the request from manufacturers, retailers and trade groups.

Meanwhile, a plan by port truckers to seek a Federal Motor Carrier Safety Administration waiver to hours-of-service rules to clear the California backlog remains in limbo. No waiver request had been filed at press time.