Exporters and importers should be developing options to prepare for a possible disruption at West Coast ports this year as the International Longshore and Warehouse Union and employers represented by the Pacific Maritime Association prepare to negotiate a new contract for one that expires July 1, said Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC).
“Large importers are already developing, testing and implementing alternative routing to U.S. West Coast ports, either all-water via Panama Canal, or via Canadian West Coast ports,” he said in a note to AgTC members. “Both importers and exporters should be developing options, should there be disruption at the West Coast ports. This includes developing relations with alternative ports, with carriers serving those ports, the truckers, warehouses, etc.”
AgTC is a premier organization for shippers of agricultural and forest products, and Friedmann is also known for his role as counsel to the Coalition of New England Companies for Trade, which hosts its annual Northeast Trade and Transportation conference this week.
Friedmann said that based on the actions of ILWU locals in the past year, particularly at Oakland and Portland, “many wonder if all the locals will adhere to contract provisions negotiated by the ILWU. Further, one has to wonder if in the months leading up to contract expiration, the locals will all be coordinated, or will some locals engage in their own strategies to pressure the terminal operators?”
He wrote that, “over the past 12 months, ALL container terminals on the West Coast have been shutdown by ILWU for varying lengths of time (from a few hours in Tacoma to five days in LA/Long Beach), and this was without any contract expiration in sight. The ILWU locals, to varying degrees, have been willing, even eager, to flex their muscles. So, we should not be surprised to see disruption and slow-downs at all the U.S. West Coast marine terminals during June and beyond.”
Friedmann also said he believed that, “President Obama, a close friend of organized labor, will not invoke Taft-Hartley to force the union back to work, should they walk.”
Shippers concerned about a disruption at West Coast ports have the option of routing cargo through ports on the U.S. East and Gulf ports, as well as through Canada and Mexico.
Friedmann wrote that, “In case of West Coast port shutdown, Canadian ports’ longshoreman should handle cargo that has some history of coming through Canadian ports, and is arriving on ships that regularly call the Canadian ports. However, they will not likely handle ships diverted from U.S. ports.”
If more cargo is routed through East Coast and Gulf ports, that would continue a pronounced trend that has been underway for several years.
The PMA’s 2013 annual report said that, “During the past five years, while containerized cargo volumes in North America have risen slightly, the West Coast share has dropped. Consider imports, which drove West Coast growth for two decades: In 2008, the West Coast share was 48.6 percent. By 2013, it had fallen to 43.5 percent, according to a review of U.S. trade data. These figures … tell a simple story: East Coast and Gulf Coast ports are gaining volume at the West Coast’s expense.”