Talks to Resume Ahead of Sept. 30 Expiration of Labor Contract at East, Gulf Coast Ports
This story appears in the Sept. 17 print edition of Transport Topics.
Talks are resuming this week between management and the union that represents East Coast and Gulf Coast dock workers as negotiators work against a Sept. 30 contract expiration.
The International Longshoremen’s Association and the United States Maritime Alliance are resuming talks under the auspices of a federal mediator at an undisclosed location. Earlier negotiations broke off on Aug. 22.
At the same time, worried international freight shippers said they are moving ahead with contingency plans, primarily focused on West Coast ports.
“We haven’t been talking about anything else for weeks,” said Judith Taylor, vice president of logistics and international compliance for medical supplier NXStage Medical Inc., Lawrence, Mass.
“You have to have contingency plans,” she said on Sept. 6 at an investor meeting in New York. “We are watching it very carefully.”
“The overwhelming majority of our members have taken diversion steps or are in the process of doing so,” said Peter Gatti, executive vice president of the National Industrial Transportation League, a shipper group.
He said members were reluctant to share details or estimate the cost of any disruption.
Gatti said shippers are worried that diversions could overwhelm the rail and truck networks where capacity is adequate now but would likely be far from enough to move a diversion-related surge.
“Things could unravel quickly,” he said, noting that most customers were diverting freight through West Coast ports.
Spokesmen for ports in Los Angeles and Long Beach, Calif., said there are no discernible signs of diversion that might show up in monthly cargo reports that haven’t been issued yet for August.
“Even if we get a bump up, it will be hard to tell why,” Port of Long Beach spokesman Art Wong said. “Last year, because of the uncertainty in Europe, our numbers dived in August. It’s likely we’ll see better numbers this year, just by comparison.”
“We have heard reports of cargo that will or may be rerouted west, but we haven’t seen it showing up on our docks yet,” said Phillip Sanfield, a spokesman at the Port of Los Angeles.
Bruce Wargo, who heads a company that measures daily cargo flow through Southern California ports, said “although several terminals are very busy, overall there has not been a noticeable surge in cargo. Ships calling are 90% to 95% full now, going into our normal busy period.”
Anticipating a potential disruption, ocean carriers such as Maersk Line have told the Federal Maritime Commission they could impose congestion surcharges ranging up to $1,266 per shipment, beginning on Oct. 7.
Clogged freight networks in the United States can lead to delayed or missing shipments that can hurt manufacturing, NITL’s Gatti said, citing a 2002 work stoppage.
During the 2002 West Coast port lockout, consultants estimated that the shutdown cost the U.S. economy $1 billion a day. In that case, President George W. Bush had to step in and impose an end to the strike.
