The Agriculture Transportation Coalition, a principal trade organization for exporters of food and forestry products, on Thursday released an open letter
urging the International Longshore and Warehouse Union and employers to “take action to keep U.S. West Coast ports (and the cargo that is dependent upon them) viable.”
The letter to Robert McEllrath, president of the ILWU, and James McKenna, president and chief executive officer of the Pacific Maritime Association, comes one month after the two organizations began negotiations on a new labor agreement to replace the contract that expires at the end of this month.
AgTC said "powerful global and national trends that are out of your (and our) control are beginning to determine how much import and export cargo will flow through West Coast ports.
The letter, approved by the AgTC Advisory Board, "reflects the input of dozens of our members from all around the country," said Peter Friedmann, group's executive director.
“These trends are of concern to us and should be of concern to you — we are in the same boat," Friedmann wrote. "The trends threaten your terminals, your jobs, and our ability to sell our exports overseas. So it is imperative that those factors which you, as terminal management and labor can control, such as productivity and cost, be mobilized to help mitigate projected long term risks.
Among the trends the letter cites are:
- Shifting production of consumer goods to South Asia, making Suez routings to the U.S. East Coast and Gulf ports more attractive than shipping through West Coast ports.
- The fast-growing population in the East and South of the U.S., where two-thirds of the U.S. population live. “That is why importers of consumer goods are increasingly bringing those cargoes through the most direct route, via the Suez Canal to the ports closest to those consumers” and building distribution centers closer to East and Gulf Coast ports, he wrote.
- An increase in manufacturing in the Southeast U.S., meaning more cargo for nearby ports.
- Crane productivity at some Eastern and Gulf ports that is better than the average at West Coast ports.
- The fact that dredging at East Coast ports means the deep-water advantage that Puget Sound and Southern California ports have traditionally enjoyed is being lost.
- Increased competition from Canadian and Mexican ports.
- The new Panama Canal locks that will allow bigger ships to transit the Canal and could make East and Gulf Coast ports more attractive to both importers and agriculture exporters.
“If an increasing share of our imports start entering predominantly through Gulf and East Coast ports, that is where the ‘empties’ will be,” he wrote. “It will not be impossible for the flow of some (but certainly not all) ag and forest products to change directions. Instead of heading west from our Midwest, it could head east or south before being loaded on a ship. That is already happening."
He continued, “Like the ports, ILWU and terminals, we (agriculture and forest products) are stuck in place physically. Cotton fields, lumber mills, almond orchards, citrus groves, dairy farms, meat packing houses, hay/straw fields cannot and will not move.”
AgTC noted its members are subject to global competition and require the most efficient access route to Asia, the largest and fastest growing market for their goods.
With delivery by container being demanded increasingly for some products, AgTC said, "if import containers are not available for West Coast port transit, or the cost of West Coast port transit — in terms of price and delay — continues to escalate, our foreign customers will be looking to ag producers in those countries which are efficient and cost-competitive."
Friedmann continued, “We hope that during the course of your negotiations this summer that port operations are not disrupted. However, we think the stakes for all of us are much higher than just the short term conclusion of negotiations."
The group asked the contract negotiators to work towards assuring long-term cost and operational competitiveness of U.S. West Coast ports, as measured against U.S. East and Gulf Coast, Canadian, European, and Asian ports, and view U.S. farmers and agriculture and forest products exporters as "your long-term partners anchoring business flows and waterfront jobs on the West Coast."