What We Learned This Week
Enough Already … Like so many dysfunctional relationships, the uneasy marriage between the Pacific Maritime Assn. that manages the major ports of the West Coast and the members of the International Longshore and Warehouse Union that works them just gets nastier as it goes on … and on … and on. A few days ago the PMA announced that it would suspend operations for the four-day, holiday weekend. The PMA gave its reasons, the ILWU responded in kind and, just like the time before and the time before that, nothing happened. As is usually the case under such circumstances, it is the couple involved dependents that are the real victims and they are raising their voices as loud as they can to say they don’t care who’s right or who’s wrong, they just want things to be the way they used to be. “The continued intransigence by labor and management to reach a new contract is unacceptable,” said Jonathan Gold of the National Retail Federation, a group whose members not only stand to lose millions in the short term but are concerned about losing permanent market share. “Retailers and the rest of the supply chain are frustrated beyond belief … The time for action has come.” Gold’s sentiments were echoed by Peter Freidman, executive director of the Agriculture Transportation Coalition, who said “the agriculture industry is not only taking multi-million dollar losses every day that goes by, but will likely lose many overseas customers permanently to other countries that can supply potatoes, hay, corn, beef, lumber and other commodities more reliably because ports in those countries are far more efficient … ” Did you hear that pain, fellas? Settle it, if not for you then those who have put themselves in your care. C’mon, it’s Valentines Day!
Hello? … So, what happens if there was an economic cataclysm if pretty much no one pays it any attention? The aforementioned four-day West Coast port shutdown, which could lead to the first full-on port shutdown since 2002, would be an absolute disaster—especially for the West Coast ports that are shipping the great majority of goods to emerging Asian markets; emerging Asian markets that could soon be looking, and buying from elsewhere. That’s pretty heady stuff, and yet on the day the shutdown was to begin we couldn’t help notice that there was little notice given of the shutdown on any of the major financial sites. We’re not out to embarrass anyone so we’re not going to mention any specific sites—you know them, though—but while there are plenty of pieces about the American oil rig production and how Vince McMahon and the WWE are the future of the sports industry, there was no mention made of the ports. Why? Dunno. Perhaps the financial media has grown just as weary of the backbiting and accusations between the warring parties and shippers who depend on them. Perhaps its because the slowdown and, now, shutdown, hasn’t caused any real noticeable shortages for the American consumer. And perhaps exporting and importing just isn’t as sexy a story as the WWE. Then again, how much more can these two beat up on each other before someone notices?
Ouch, The Irony … On Thursday, Japanese Prime Minister Shinzo Abe gave a speech to that country’s legislators pledging to tackle the greatest reforms “since the end of World War II” to improve all manner of sectors from security to infrastructure to agriculture to trade. Regarding the latter two, Abe said that on the 70th anniversary of the conclusion of the war, his government will implement growth strategies including the first reforms of agricultural cooperatives in 60 years and bold regulatory reforms as well as push for an early conclusion to Trans-Pacific Partnership trade agreement that has caused a riff in the U.S. between Democratic lawmakers and the White House. Given the above two items, how ironic, and tragic, would it be to finally have the Trans-Pacific in place while the ports that would most benefit from it sit quiet and useless?