Farm Exports Hurt: West Coast Ports and Canadian Rail Labor Disputes Worsen – DTN

    Talks between West Coast dock workers and employers have stalled and the White House will be sending U.S. Labor Secretary Thomas Perez to referee the disagreement. However, some industry watchers say it’s too late as some shippers make plans to move away from West Coast ports to other venues.

    Union workers are suspected of launching deliberate work slowdowns at West Coast ports and on Feb. 11, the employers’ group, the Pacific Maritime Association (PMA), announced suspension of four days of premium-pay weekend and holiday vessel operations — Feb. 12 (Lincoln’s Birthday); Feb. 14; ‘Feb 15; and Feb 16 (Washington’s Birthday).

    Here is the link to the entire PMA press release:…

    Robert McEllrath, president of the International Longshore and Warehouse Union (ILWU), told the New York Times the employers were deliberately making the congestion crisis worse to gain leverage at the bargaining table.

    PMA spokesman Wade Gates said, “Last week, PMA made a comprehensive contract offer designed to bring these talks to conclusion. The ILWU responded with demands they knew we could not meet, and continued slowdowns that will soon bring West Coast ports to gridlock. What they’re doing amounts to a strike with pay, and we will reduce the extent to which we pay premium rates for such a strike.”

    According to the PMA press release, one of biggest issues right now is a demand by the union to have the right to fire any arbitrator who rules against them at the end of each contract period, even though those arbitrators are the mediators who keep West Coast ports operating smoothly. The PMA said that, “During the 2008-2014 contract period, the four area arbitrators found the ILWU guilty of more than 200 slowdowns or work stoppages.” The PMA said allowing this demand to be met could “cripple the West Coast waterfront.”

    A Midwest container broker with customers on the West Coast told DTN on Friday, “The situation is now unsustainable; there will either be a breakthrough and a tentative agreement which will keep in place the current situation until ratified and signed. Even still, once the Union starts working at full capacity it will take three to four months to clean up the mess. Or, there will be a strike or lockout, then after a week Taft Hartley will be invoked, forcing them to go back to work and negotiate, which will get us back to the current stalemate essentially until they work something out.

    “In my opinion,” he said, “the ILWU realizes that importers will be using the West Coast less in the future due to the increase in Canadian port productivity, more direct via Suez shipping to East and Gulf Coast — 65% of the consumer market is east of the Mississippi I think, if not more — the wider Panama, and the new Mexican port and rail connections. I think they are going for it all now as they know the long-term outlook for the West Coast work load is not good.”

    One sign of that became apparent on Feb. 10 when Hanjin Shipping Co. withdrew officially from the Port of Portland saying their last day will be March 4. According to The Oregonian, shipping companies that work with Hanjin received a letter saying Portland had been dropped as a stop for container ships and Portland would only be serviced by truck and rail via the Seattle port. The Oregonian noted that Hanjin ships account for 78% of the business at Terminal 6, moving 1,600 containers per week. Those shipments moved most Oregon agricultural exports to Asia, and brought apparel for Northwest-based companies like Nike and Columbia Sportswear in and out of the country and generated $83 million annually.

    In a Feb. 11 article, the Associated Press reported that Hanjin’s pullout isn’t a surprise. In recent years, the company has been unhappy about the pace of work among longshore workers and announced its intention to withdraw two years ago. “If you are in Portland you should know why. Can’t afford the expense of operating there. Simple,” said Mike Radak, senior vice president for Hanjin USA.

    Late Saturday evening on Feb. 14, the Wall Street Journal reported the White House said it would intervene in stalled labor talks at West Coast ports, sending the labor secretary to meet with both parties and urge them to complete a new contract and avoid further slowdowns. “Out of concern for the economic consequences of further delay, the president has directed Secretary of Labor Tom Perez to travel to California to meet with the parties to urge them to resolve their dispute quickly at the bargaining table,” White House spokesman Eric Schultz said in a statement.

    There are some who feel that the White House has good intentions, but it may be too late to solve the differences between the two groups. The National Retail Federation told the WSJ it hopes Perez can recommit the two sides to reaching a deal. “The slowdowns, congestion and suspensions at the West Coast ports need to end now.”


    The Canadian National (CN) railroad went into this weekend facing potential strike action from two unions representing the company’s employees. DTN Canadian Grain Analyst Cliff Jamieson said thanks to an agreement with Unifor, the union representing about 1,800 CN safety and maintenance workers was struck just prior to the deadline. “CN Rail reports that a tentative agreement has been reached between that company and the Teamsters union, with will be voted on in April and negotiations with Unifor continue,” said Jamieson.

    “At the same time, a deal between the Canadian Pacific (CP) and the Teamsters Canada Rail Conference was not reached, which meant that approximately 3,300 engineers and train workers went on strike as of 12:01 a.m. on Sunday morning.” Jamieson added, “The strike may not be a long one. On Friday, the Canadian government paved the way for introduction of back-to-work legislation that will likely be introduced on Monday. The Globe and Mail reports that the last time CP workers walked off the job in 2012 estimates pegged the potential damage to the Canadian economy at $540 million/week. The current strike will see close to 20,000 commuters impacted on three commuter lines in Montreal which will place further pressure on government to intercede.”

    “The current labor dispute comes at a time when both railroads are behind in spotting cars for grain movement. The most recent statistics suggest both railroads were behind 17,701 cars as of week 24, or the week ending January 18. Of this total, 7,732 cars are CN, while a further 9,969 cars are CP. This volume represents 10% of total demand with 46% of this total have been outstanding for more than four weeks.”

    Mary Kennedy can be reached

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