Monday, February 23, 2015

Container Freight Starts to Move Again as US West Coast Port Dispute Appears Over

At Last - My Truck Has Come Along (apologies to Etta James)
Shipping News Feature

US – Tentative, that was the word used by both sides to explain the agreement reached on Friday to end the port labour dispute that has crippled the West Coast ports for months and damaged numerous US businesses, some probably fatally. As staff from the International Longshore and Warehouse Union (ILWU) started work moving the freight containers on Saturday there still seemed to be a degree of resentment on both sides as the deal awaited ratification from the workforce itself.

Despite the return to work there is bound to be a lot of bad feeling, particularly from shippers which rely on fast transits to maintain their businesses, importers waiting for weeks for goods to clear the docks, farmers exporting fruit and vegetables to Asia who saw their produce rot in containers awaiting shipment. For those companies at home and overseas who managed to find more reliable, if slower, supply routes, there will be no going back, particularly as rates fall on alternative passages with the urgency the slow-down produced now over.

As we predicted last week it seems a combination of veiled threats and sympathy from President Obama’s envoy and arbitrator Secretary Tom Perez swung the deal and we now wait to see when the vote whether to accept the new contract or not is to be taken. Despite near normal working at the weekend there were more ships waiting to be worked at Los Angeles this morning than were there on Friday as the dispute ended.

Typically at the Port of Oakland 13 vessels were at berth today and 16 awaiting berths, a situation the Port says should resolve itself, but with up to two months before the backlog is cleared. The Port was keen to point out that it is not the employer, therefore not directly involved, as it is the terminal operators who employ the staff concerned and negotiate the contracts. Apparently yesterday all longshore staff took their breaks at the same time, prompting the Oakland based employers to dismiss them when an arbitrator ruled the action an illegal stoppage. The ILWU had demanded previously that it have the right to dismiss arbitrators at the end of a contract, a move the Pacific Maritime Association (PMA) which represents the employers, described as akin to blackmail. There are no details as yet to say if the new deal allows for any change in arbitration.

As the twenty nine affected ports returned to normality the Port of Los Angeles estimated three months to resolve the situation whilst the Port of Oakland said it had introduced ‘extraordinary measures’ including weekend gates, express lanes, additional truck parking and daily status reports for shippers whilst working with the marine terminals, truck drivers and shipping lines on additional issues including chassis availability, demurrage charges and appointment systems.

Unfortunately the disruption has caused some of the container lines to change routes, meaning the Port of Oakland, and others, have been excluded from the port rotations. This has left export cargo sitting in limbo on the quay waiting for ships which were never coming with imports discharged miles away at ports like Los Angeles. There will need to be a massive public relations exercise to get shippers back on side.

As is usual with these disputes the cry went up from a cross section of ports and their customers that ‘this situation must never be allowed to happen again’, however the US port sector seems steeped in what many consider redundant work practices and the unions would appear to have no will whatsoever to change the situation. As the Port of Oakland said in a statement, ‘There’s a history of challenging bargaining over waterfront contracts. The hope is that both sides will recognize the need to settle future contracts without further damaging the economy'. Hope it seems is the best thing on offer.