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Federal Mediation OK’d for Stalled Port Labor Talks

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Federal Mediation OK’d for Stalled Port Labor Talks

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Los Angeles, CA –Several of the nation’s largest industry groups are expressing relief with the news that a federal mediator will be assigned to referee the stalled labor contract negotiations between the Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union (ILWU).

The PMA represents the terminal operators and ocean carriers that call at 29 ports on the U.S. West Coast from Seattle to San Diego; the ILWU represents the 20,000-plus dockworkers employed at the ports’ cargo terminals who’ve been without a contract since last July 1.

Reacting to the announcement from the U.S. Federal Mediation and Conciliation Service, Jonathan Gold, vice president of Supply Chain and Customs Policy at the National Retail Federation (NRF) said, “After months of heated rhetoric and increasing cargo congestion, this is the first positive news from the West Coast ports in some time…we sincerely hope the FMCS-supervised negotiations will progress quickly and that final agreement on a new labor contract will be reached relatively soon.”

Robyn Boerstling, director of Transportation and Infrastructure Policy at the National Association of Manufacturers (NAM), called the intervention of a federal mediator “welcome news.”

Commending the PMA and the ILWU for “taking this critical step in order to keep negotiations on track with the goal of reaching a long-awaited agreement between the negotiating parties,” Boerstling said U.S. manufacturers “depend on the ability of West Coast ports to efficiently move cargo valued at 12.5 percent of U.S. GDP and a prolonged slowdown would continue to inflict long-term damage to the economy.”

Both the NRF and the NAM have called for federal mediation since the beginning of the labor negotiations. Last month, the two Washington, D.C.-headquartered groups led a group of 160 national trade groups urging both the PMA and the ILWU to iron-out their differences and end the impasse.

American Association of Port Authorities (AAPA) President and CEO Kurt Nagle also applauded the decision to name a mediator saying, “We believe that federal mediation will result in a fair and equitable agreement, and that without prompt settlement of the issues, our entire nation – not just the West Coast – could suffer long-term, detrimental economic and trade-related impacts from the unpredictability of goods movements through our ports.”

On Dec. 17, AAPA sent a letter to President Obama, advocating that he begin the process of assigning a federal mediator to help the two parties reach an amicable contract agreement. Earlier, the U.S. Congressional delegations from California, Oregon and Washington state, appealed to the White House for intervention in the negotiations.

The ports impacted handled $892 billion in imports and exports in 2013, according to the latest data as work slowdowns by ILWU members at Los Angeles, Long Beach, Oakland, and Seattle – several of the nation’s busiest container ports – have had a huge negative impact on the flow of manufactured goods, agricultural products, and raw materials in and out of the country.

1/07/2015

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ILWU Waves-Off Pleas for Federal Contract Mediation

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Los Angeles, CA – The International Longshore & Warehouse Union (ILWU) has reportedly waved-off calls for federal mediation to break a deadlock in contract negotiations to end an on-going work slowdown that has handicapped operations at 29 U.S. West Coast ports.

The union, which represents more than 20,000 dock workers at ports from Tacoma to San Diego, has said it wants the 11 members of the board of the Pacific Maritime Association (PMA) to join in the negotiations that have stretched out since a six-year labor contract expired July 1.

The PMA, which represents the shipping lines and terminal operators at the ports, has accused the ILWU of instigating slowdowns since October to gain leverage at the bargaining table.

The union, which denies causing the bottle-necks, has countered saying the terminal operators and shipping lines themselves are largely to blame for bad business decisions that have disrupted port operations.

Chief among these, the union asserts, is the decision to out-source the tractor-trailer chassis used for hauling containers in to and out of cargo terminals from third-party logistics providers.

Last week, the San Francisco-headquartered PMA called for the ILWU to consent to federal mediation to help get the negotiations moving, saying “significant issues” including differences over wages, pensions and work rules “remain unresolved” after seven months of contract talks.

The two sides announced a provisional deal on health-care expenses in late August, without disclosing terms. Another issue is the retention of jobs for dockworkers as automation developments in cargo handling reduces the number of people needed to ‘work’ containerships.

The cargo back-ups at the ports have significantly impacted the flow of nearly half of U.S. maritime trade and more than 70 percent of imports from Asia.

Cargo that normally takes two or three days to clear the ports has faced lag times of up to two weeks, with productivity at some waterfronts cut by at least half, industry analysts say.

Last month, more than 160 associations and industry groups led by the National Association of Manufacturers and the National Retail Federation addressed a letter to President Barack Obama “expressing our continued concerns with the status of the West Coast port labor negotiations and the impact the ongoing congestion and slowdowns are having on all segments of the economy.”

The letter urged the White House to name a federal mediator to referee the negotiations and break the deadlock, but the White House’s only response to the situation has been a statement released in November stating that the president was “hopeful the negotiations would come to a successful conclusion.”

The statement was in response to an earlier letter from the U.S. Senate delegations representing California, Oregon and Washington state detailing the negative impact of the situation and asking the president to name a federal mediator.

01/05/2015

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Another Appeal for White House Action on Port Talks

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Los Angeles, CA – The American Association of Port Authorities (AAPA) has joined the chorus of national organizations with a letter to the White House urging to appoint a federal mediator to administer the ongoing contract negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA).

“America’s seaports are absolutely vital to our economy, jobs and international competitiveness,” said Kurt Nagle, AAPA president and CEO.  “At this tender stage of the economic recovery, our nation simply cannot afford disruptions, let alone a shutdown, of any part of the ports system.”

Contract negotiations between the ILWU and the PMA have dragged on since the end of May with work slowdowns at the 29 U.S. West Coast ports affected by the talks significantly cutting into cargo volumes. Particularly impacted are the major ‘load center’ ports of Los Angeles, Long Beach, Oakland, Seattle and Tacoma.

After seven months of labor negotiations without an agreement being reached, he said, “we believe that federal mediation is now necessary to prevent the significant economic repercussions that can occur whenever there is uncertainty and unpredictability in the movement of international commerce through our ports.”

According to the port group, international trade accounts for nearly one-third of the U.S. economy with the country’s seaports handling more than 99 percent of the nation’s overseas imports and exports, amounting to more than 2 billion tons of goods annually.

“This mammoth flow of trade supports more than 13 million American jobs and generates over $200 billion a year in tax revenues. Disruptions to this trade flow hurt American businesses and farmers, cost American consumers and impede America’s ability to compete in international markets,” wrote Nagle.

Over the last several weeks, a coalition of businesses and trade organizations, led by the National Association of Manufacturers and the National Retail Federation, have communicated with the White House urging the President to take action, while Congressional delegations from California, Oregon and Washington have also communicated with the White House calling for executive action.

In mid-November, the White House issued a statement from the President saying that he was “confident” the negotiations would come to a successful conclusion.

12/18/2014

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Holiday Imports Decline as Port Issues Linger

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Los Angeles – Import cargo volume at the nation’s major retail container ports is expected to continue to slow down this month as cargo congestion and other issues continue to impact port operations on the U.S. West Coast.

The volume slide is a result of “far-sighted retailers instituting costly contingency plans early on to ensure that holiday merchandise would be on the shelves or sitting in a warehouse ready to go,” according to National Retail Federation Vice President for Supply Chain and Customs Policy Jonathan Gold.

“However, we are still hearing from retailers experiencing delays at West Coast ports, and retailers are also looking ahead to the spring season,” he said, commenting on the most recent Global Port Tracker report released today by the NRF.

“We believe it’s imperative for President Obama to encourage the parties to seek the help of a federal mediator to resolve the ongoing contract negotiations so serious solutions to address the ongoing issues can be discussed and the uncertainty that has plagued our nation’s busiest ports for months can finally be brought to an end.”

A major transpacific shipping alliance – the G6 – has reacted to the congestion problem by suspending eastbound calls at the Port of Los Angeles for the next four sailings of its Asia-U.S. West Coast service, due to “ongoing congestion.”

The G6 is comprised of APL, Hapag-Lloyd, Hyundai Merchant Marine, MOL, NYK Line and OOCL.
It’s also been reported that G6 will skip other calls at APL’s Global Gateway South terminal in Los Angeles in order to “remain fluid,” according to an APL customer advisory.

Carriers calling Los Angeles and other U.S. West Coast ports have been significantly impacted by chronic backlogs that have plagued the Los Angeles/Long Beach port complex over the past few months.

The congestion in Southern California is due to a combination of chronic issues plaguing both Los Angeles and the neighboring Port of Long Beach that include a shortage of the chassis need to move containers in and out of the ports; unrest amongst truckers required to meet what they feel are increasingly burdensome environmental regulations; and labor negotiations between the Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union (ILWU) that have dragged on for months with, some feel, no end in sight.

The contract between the PMA and the ILWU expired on July 1, prompting ongoing concerns about the potential shift of cargo to ports on the U.S. East Coast.

The NRF report was researched by business consultancy Hackett Associates.

According to Hackett Associates President Ben Hackett, “The question is whether cargo currently being diverted to the East Coast will shift back to the West Coast once congestion in Los Angeles/Long Beach ends or are we experiencing a longer-term shift?” Hackett said. “Time will tell.”

12/09/2014

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Shippers Steam as Port Negotiators Take a Thanksgiving Break

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Los Angeles, CA – The International Longshore and Warehouse Union (ILWU) is being slammed for refusing to hold “big table” West Coast labor contract talks during a 12-day break that extends through the Thanksgiving weekend.

“Three weeks after initiating a coordinated series of slowdowns that have plagued the major West Coast ports of Tacoma, Seattle, Oakland, Los Angeles and Long Beach, the International Longshore and Warehouse Union has now taken its slowdown tactics to the bargaining table,” the Pacific Maritime Association (PMA), the other party in the negotiations, said in an angry statement.

As a result of the ILWU’s decision, the PMA said, “the only bargaining through December 1 will be limited to subcommittees discussing “limited” issues.

No Contract Extension

“Making matters worse, the ILWU is refusing to agree to a temporary contract extension – similar to one it signed over the summer – despite multiple requests,” the PMA said.

A contract extension, the PMA said, “would give both parties access to the well-established waterfront grievance process, and most notably would give employers recourse for the ILWU slowdowns that are continuing.”

The Thanksgiving break “and the Union’s refusal to extend the contract are taking place amid continuing worker slowdowns, which began on Halloween in Tacoma and soon spread to Seattle, Oakland, Los Angeles and Long Beach.”

In some ports, the PMA charged, “productivity remains 30 percent or more below normal, as a result of orchestrated ILWU maneuvers.”

This productivity loss, it said, “is distinct” from the congestion that has caused severe congestion at the ports of Los Angeles and Long Beach.

“In fact, those two ports were the only major West Coast ports that experienced congestion prior to ILWU slowdowns, and the ILWU has knowingly made the situation in Southern California worse by failing to dispatch qualified crane operators per longstanding practice – the same skilled workers who can help to alleviate yard congestion,” the PMA said.

National Retail Federation Responds

In reaction to the break in contract talks, the National Retail Federation (NRF) is repeating its call on the White House “to immediately engage the parties to get them back to the negotiating table.”

According to a statement from NRF President and CEO Matthew Shay, “After six months of negotiations we have seen very little progress. It’s time the parties accept a federal mediator to help them bridge the gaps and arrive at a new contract.

Without a contract, he said, “stakeholders cannot work on addressing the ongoing congestion issues at the ports.

The nation’s retailers and our vendors, suppliers and customers are counting on the two parties to act responsibly.”

Earlier this year, NRF and the National Association of Manufacturers released a report that found a shutdown at 29 U.S. West Coast ports from Seattle to San Diego would cost the economy about $2 billion a day.

11/21/2014

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White House Engagement Urged in Port Dispute

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Los Angeles, CA – Led by the National Retail Federation, a diverse coalition including retailers, manufacturers and farmers and other supply chain stakeholders has addressed a letter to the White House urging the government’s immediate involvement in the on-going contract negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU).

Port terminal management represented by the PMA and the leadership of the ILWU have held talks since May, but have yet to approve a final agreement on a contract that expired in July, which covers dockworkers at 29 U.S. West Coast ports from Seattle to San Diego.

While the two parties have said they would remain at the negotiating table until a new deal is struck, recent labor activities – most recently at the Port of Seattle and Port of Tacoma – “have led to a noticeable uptick in rhetoric and tensions that is causing the nation’s importers and exporters anxiety and alarm,” the letter said.

“The sudden change in tone is alarming and suggests that a full shutdown of every West Coast port may be imminent,” it read. “The impact this would have on jobs, down-stream consumers, and the business operations of exporters, importers, retailers, transportation providers, manufacturers, and other stakeholders would be catastrophic.”

The coalition detailed what it asserts would be the impact of a port shutdown, including damaging the viability of the West Coast ports and the economic consequences of disrupting the supply chain.

The group called on the Obama Administration “to become engaged in the contract negotiations before a disruption can occur,” and recommended the use of a federal mediator to forestall any threat of a management-directed lockout or labor-initiated strike.

“We believe immediate action is necessary and the federal government’s use of all of its available options would be helpful in heading off a shutdown and keeping the parties at the negotiating table,” the letter said.

The NRF and the National Association of Manufacturers (NAM) issued an economic analysis in June that found a port shutdown would cost the U.S. economy approximately $2 billion a day.

The NRF-NAM analysis estimated that a 5-day stoppage at ports on the U.S. West Coast would reduce U.S. GDP by $1.9 billion a day. This would increase exponentially with a 20-day stoppage resulting in a loss of $2.5 billion a day.

The last prolonged port shutdown of the ports was the 10-day lockout in 2002 which took months to recover from and cost the U.S. economy close to an estimated $1 billion a day.

11/07/2014

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No USWC Port Labor Contract Worries Retailers

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Washington, DC – Import cargo volume at the nation’s major retail container ports is expected to see a final surge and set a new monthly record in October as the holiday season approaches, according to the National Retail Foundation’s monthly Global Port Tracker report.

“Increasing congestion at the nation’s ports, as well as the ongoing West Coast labor negotiations, are ongoing concerns and retailers are making one last push to make sure they’re stocked up for the holidays,” said Jonathan Gold, the NRF’s vice president for Supply Chain and Customs Policy.

“Retailers are working hard to make sure customers can find what they’re looking for regardless of what happens at the ports.”

The contract between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) affecting cargo movement at US West Coast (USWC) ports expired on July 1, prompting concerns among the nations’s retailers and others about potential disruptions that could affect back-to-school or holiday merchandise.

The Washington, DC-based NRF recently sent a letter to the heads of the PMA and the ILWU urging a speedy, successful conclusion to their on-going negotiations.

Dockworkers remain on the job as negotiations continue but the lack of a contract and operational issues “have led to record congestion” at ports from Seattle to San Diego, the industry group said.

“Finalizing a new labor contract is an absolutely critical component to working through the backlog of shipping containers now piling up at West Coast ports,” the letter read. “We are deeply troubled by the fact that no apparent progress has been made in the negotiations since August, when the PMA and ILWU announced a ‘tentative deal’ on health benefits.”

The NRF, the largest retail industry group in the world, chided both groups for their lack of transparency, saying that, “Whether intentional or not, the fact that neither the PMA nor ILWU has made any public progress report in more than a month is sending a very troublesome and disconcerting signal.”

Shippers, the NRF said, “look for certainty when making strategic long-term supply chain investments, or for placing transportation orders for discretionary cargo.”

The ongoing negotiations “and the degradation of operating efficiency, specifically at the ports of Los Angeles and Long Beach, is making the region unattractive for future investment and will lead to a permanent shift of cargo,” the letter concluded.

Import volume at US ports covered by the Global Port Tracker report is expected to total 1.53 million containers this month, topping the 1.52 million monthly record set in August. Cargo volume has been well above average each month since spring as retailers have imported merchandise early in case of any disruption on the docks.

The 1.52 million TEUs (Twenty-Foot Equivalent Unit cargo containers) handled in August, the latest month for which after-the-fact numbers are available, was up 1.5 percent from July and 2.1 percent from August 2013.

The import numbers come as NRF is forecasting 4.1 percent holiday season sales growth and 3.6 percent growth for all of 2014.

Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the US West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the US East Coast, and Houston on the US Gulf Coast.

10/10/2014

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Boxed Imports Expected to Reach All-Time High

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Washington, DC – Import volume at major US container ports is expected to hit an all-time record in August as retailers concerned about the lack of a West Coast longshoremen’s contract rush to bring holiday season merchandise into the country, according to the latest monthly Global Port Tracker report.

“The negotiations appear to be going well but each week that goes by makes the situation more critical as the holiday season approaches,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said.

Retailers, he said, “are making sure they are stocked up so shoppers won’t be affected regardless of what happens at the ports.”

Import volume at the ports covered by the Global Port Tracker report, just released by the National Retail Federation (NRF) and business consultancy Hackett Associates, is expected to total 1.54 million containers this month.

That’s the highest monthly volume since NRF began tracking import volume in 2000, topping a previous record of 1.53 million set in July and unusually high numbers seen this spring as retailers began importing merchandise early in anticipation of this summer’s contract talks.

The contract between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) expired on July 1 with dockworkers pledging to remain on the job as both sides continue to negotiate a new agreement.

Both sides report that the on-going contract negotiations have been “productive” with the NRF urging both sides to avoid any disruptions that could affect the flow of seasonal back-to-school or holiday merchandise.

US ports followed by the report handled 1.48 million TEUs (Twenty-foot Equivalent Units) in June, the latest month for which after-the-fact numbers are available. That was down 0.38 percent from May but up 9.1 percent from June 2013. One TEU is one 20-foot cargo container or its equivalent.

July was estimated at 1.53 million TEU, up 5.8 percent from the same month last year, and August is forecast at 1.54 million TEU, up 3.6 percent from last year. September is forecast at 1.48 million TEU, up 2.8 percent from last year; October also at 1.48 million TEU, up 3.3 percent; November at 1.37 million TEU, up 2 percent; and December at 1.34 million TEU, up 2.1 percent.

Those numbers would bring 2014 to a total of 17.1 million TEU, an increase of 5.2 percent over 2013’s 16.2 million. Imports in 2012 totaled 15.8 million. The first half of the 2014 totaled 8.3 million TEU, up 6.9 percent over last year.

The import numbers come as NRF is forecasting 3.6 percent sales growth in 2014. Cargo volume does not correlate directly with sales but is a barometer of retailers’ expectations.

Hackett Associates CEO Ben Hackett said the increases in volume reflect both improvements in the economy and retailers importing merchandise early because of the contract negotiations.

“US GDP has increased in 11 out of the last 12 quarters, confirming that we are in a sustained period of expansion,” Hackett said. “A significant portion of the strong upswing in imports has been due to the labor negotiations, with importers moving up shipments just in case.”

The Global Port Tracker covers container activity at the ports of Los Angeles, Long Beach, Oakland, Seattle and Tacoma on the US West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the US East Coast, and Houston on the US Gulf Coast.

08/13/2014

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Deadline Nears for West Coast Dock Contract

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San Francisco, CA – Negotiations between the Pacific Maritime Association (PMA) and the International Longshoremen and Warehouse Union (ILWU) continue as the clock ticks down to midnight, June 30 – the deadline when the current contract between West Coast dock workers and ocean terminal operators expires.

The month-long negotiations cover a contract that would frame the work of more than 14,000 dock workers at 79 ocean terminals at 29 US West Coast load centers, including the major container ports of Los Angeles, Long Beach, Oakland, Portland, Seattle and Tacoma.

If no contract has been agreed to by the July 1 deadline, both the PMA, which represents the terminal operators, and the ILWU could agree to extend the existing agreement into July, but there is no guarantee as past contract negotiations between the two groups have historically been contentious.

In 2002, negotiations got so ugly that President George W. Bush had to invoke the Taft-Hartley Act to end an 11-day shutdown of US West Coast ports, citing the port’s’ operations as ”vital to our economy and to our military.”

A study by the University of California at Berkeley that year estimated that total cost of shutting down the West Coast ports was about $2 billion a day in lost business and tax revenue from sales and wages. The strike also created a backlog of cargo that took weeks to alleviate.

The 2002 shutdown forced ocean carriers to divert cargo to ports in British Columbia and along the US Gulf and East Coasts, and compel manufacturers, importers and exporters across the country to re-configure critical supply chain and production schedules.

Traditionally the ILWU-PMA contract covers three years. But after the 2002 lockout, a six-year contract was instituted as a way of ensuring labor stability for a longer time.

The six-year duration was renewed again in 2008 as the economy was struggling and stability was again a priority. In the current negotiations, the three-year term is again back on the table.

Industry Concerns Deepen

A number of national, private-sector industry groups have communicated their growing concern that the negotiations come to a successful conclusion prior to the contract’s expiration date.

The West Coast ports are critical not only to our members, but to any business, manufacturer, farmer or anyone that relies on imports and exports for their business,” stated Jon Gold, who oversees transportation issues for the giant National Retail Federation.

Bruce Carlton, president of the National Industrial Transportation League (NITL), said during a recent press conference that  unhindered operations at US West Coast ports are “a big deal for everybody. So much of what we buy and sell in this country moves through those ports.”

The Agriculture Transportation Coalition in Washington, DC, released an “open letter” to ILWU President Robert McEllrath, and James McKenna, PMA president & CEO.

“There is nothing that we produce in agriculture and forest products in the United States, that cannot be sourced somewhere else in the world,” the letter stated. “If we cannot deliver dependably and affordably, our foreign customers will simply shift their sourcing to other countries.”

06/19/2014