After months of seemingly amicable negotiations on a new labour contract for U.S. West Coast dockworkers the Pacific Maritime Association and the International Longshore and Warehouse Union have engaged in a war of words and actions that could ultimately exacerbate delays and congestion at West Coast ports and threaten holiday season deliveries. PMA, which represents shipping companies and terminal operators at 29 West Coast ports, claimed in a 6 November press release that the “orchestrated slowdowns” that organised labour initiated in late October and early November at the ports of Seattle and Tacoma have expanded to the ports of Los Angeles and Long Beach. PMA contends that the ILWU has targeted these ports by “unilaterally refusing to dispatch hundreds of qualified, skilled workers for critically important positions transporting containers in terminal yards at the nation’s largest port complex.”
PMA adds that most of these workers have significant experience (many with more than 1,000 hours) operating yard cranes that place cargo containers on lorries and rail cars for delivery to customers. The association argues that given the already congested conditions at the ports of LA and Long Beach “ILWU’s refusal to fill critical yard crane positions makes an already difficult situation far worse.” PMA stresses that the four targeted ports collectively handle nearly 80 percent of all containerised cargo at West Coast ports and warns that the ILWU’s slowdowns “come at a critical time in negotiations for a new coast-wide labour contract, and threaten to stem the flow of cargo during the final holiday season push.”
The association further complained in a 13 November press release that continued slowdowns at the ports of Tacoma and Seattle have negatively impacted the critical harvest season for Washington State apples, potatoes, Christmas trees and other perishable produce. Union workers have also ostensibly walked off the job in Oakland, and in the ports of LA and Long Beach the union continues to short-shift crews by withholding qualified yard crane operators. To complicate matters, in a 20 November press release PMA condemned a decision by the ILWU to curtail bargaining negotiations on a new labour contract through the end of the Thanksgiving weekend. As a result, the only bargaining through 1 December will be limited to sub-committees discussing limited issues, with most members of the ILWU’s negotiating committee taking an extended break. The ILWU has also allegedly refused to agree to a temporary contract extension despite multiple requests by PMA.
The ILWU fired back with a 10 November statement stressing that the union is not responsible for the current congestion crisis at West Coast ports. The union expressed its displeasure with statements allegedly made by PMA’s public relations firm that the ILWU was the cause of bringing “the port complex to the brink of gridlock” and criticised efforts to “propagandise” about the ILWU, its leadership and false claims of safety issues. In addition, the union rejected accusations that it is “threatening to stem the flow of cargo during the final holiday season push.”
The ILWU indicates in its statement that the real causes of congestion at West Coast ports include chassis shortage and dislocation; rail service delays, including a shortage of rail cars nationwide; the exodus of lorry drivers who cannot make a living wage; long lorry turn times; record retail import volumes (increases of 5.3 percent over 2013); larger vessels discharging massive amounts of cargo; container terminals pushed to storage capacities; and the peak shipping season (i.e., the August through October pre-holiday surge). In addition, on 23 September the Port of LA experienced its largest fire in decades, which required the evacuation of 850 workers and resulted in the temporary closing of three of six cargo terminals. In closing, the union warned that “the men and women of the ILWU will not make up for the current supply chain failures at the expense of life and limb.”
Recent press reports indicate that some lorry drivers working at the ports of LA and Long Beach have gone on strike in recent days and there have been demonstrations at rail yards. Bloomberg reported on 18 November that the White House is monitoring the West Coast labour dispute but does not plan to intervene. In a newspaper opinion piece published in mid-November, the National Retail Federation, the U.S. Chamber of Commerce and the National Association of Manufacturers renewed calls for President Obama to appoint a federal mediator to help resolve the dispute and warned that a shutdown of West Coast ports would be “catastrophic.” The associations are alarmed at the “sudden change in tone,” which “suggests that a shutdown of the ports – either from a walkout by labor or a lockout by management – is imminent.”
In related news, the American Apparel and Footwear Association on 30 October sent separate letters to the Federal Maritime Commission and the Ports of LA and Long Beach calling for an immediate and sustained solution to the “untenable congestion” present in these two ports. In order to avoid excessive cargo pickup delays primarily as a result of the unavailability of chassis but also due to the lack of on-dock rail, AAFA supports (i) the swift approval by the FMC of a pending discussion agreement application by the ports of LA and Long Beach that would allow the two ports to work together on port congestion issues; (ii) an interchangeable “grey pool” of chassis that can be used by all drayage truckers; and (iii) more efficient trucking appointment systems as well as extended weekend pickup hours.
AAFA is also concerned about a high concentration of demurrage invoices in LA and Long Beach terminals throughout September and October solely as a result of “rampant port congestion.” The association welcomed a decision by the Port of Long Beach to extend free time within terminals from four to seven days during 18-31 October and is urging Long Beach to continue an extension and LA to implement similar measures. AAFA also favours the establishment of automatic triggers that extend free time when certain conditions are met and has urged the ports to encourage terminals to refund unjust demurrage charged due to unavoidable congestion.
AAFA also complains in its letters about the continued burden on apparel and footwear importers derived from the lack of a West Coast labour contract, including expensive contingency strategies, work slowdowns related to offloading containers and unnecessary inspections by ILWU labour. AAFA is therefore urging the FMC and the ports of LA and Long Beach to help achieve a resolution of the ILWU/PMA negotiations and encourage the distribution of regular progress updates on the negotiations.
Meanwhile, the FMC warned ocean carriers on 17 November to follow the rules when imposing congestion surcharges related to the labour unrest at West Coast ports. The notice came the same day a group of major shipping lines said they would begin implementing congestion charges of up to US$1,000 per 40-foot container for imports and exports of cargo moving via West Coast ports affected by labour-related terminal delays. Press reports subsequently indicated that some of these carriers were suspending these surcharges but reserved the right to impose them at any time. In response to “numerous inquiries,” the FMC reiterated that the rules applicable to any given shipment shall be those in effect on the date the cargo is received by the carrier or its agent. This means that if any labour disruption were to occur at a port after cargo has been tendered by a shipper, a carrier may only lawfully charge the rates in effect on the day the cargo is tendered.
The FMC notes that congestion surcharges or any other rule in a carrier tariff that results in increased costs to shippers may generally not be effective earlier than 30 days after publication. The Commission acknowledges that many carriers have previously published in their tariffs advance or conditional notice of their intent to implement surcharges in the event certain conditions are experienced but cautions that all such rules must be clear and definite as to the implementation and termination of those surcharges based on specific criteria related to labour unrest.