Exporters brace for West Coast port slowdown - The Packer

Exporters brace for West Coast port slowdown

07/01/2014 08:08:00 AM
Mike Hornick

The possibility of a West Coast port strike is causing headaches for some fresh produce shippers.

As of July 1, port workers are off contract, and slowdowns or disruption are possible at 29 ports from San Diego to Bellingham, Wash. The contract between the Pacific Maritime Association and about 20,000 workers represented by the International Longshore and Warehouse Union expired June 30.

Negotiations are continuing.

“It puts the shippers in an uneasy position,” said Ken Gilliland, director of international trade and transportation for Irvine, Calif.-based Western Growers Association. “Some are taking a cautious approach, curtailing some of the packing they might normally do that requires the use of ocean transport, like for the Asian markets. For perishable products you can’t wait out a strike. We’re keeping our fingers crossed that they keep negotiating and come to a resolution.”

Issues in the talks include healthcare benefits and union jurisdiction over work done by non-members.

"We are monitoring the negotiations closely and have contingency plans in place to deal with any real and/or prolonged disruption should one occur,"  said ​Bil Goldfield, director of corporate communications for Dole Food Co., Westlake Village, Calif.

A 10-day shutdown would cost the U.S. economy $2.1 billion a day, according to a study by the National Retail Federation and the National Association of Manufacturers.

The two sides have been in negotiations in San Francisco since May 12, when they said they expected cargo to keep moving until an agreement is reached. Management’s last update on the status of talks was June 4.

“West Coast ports have lost significant market share in recent years, and face renewed competition from Canada, Mexico, the Panama Canal and other domestic ports for cargo,” Pacific Maritime Association president Jim McKenna said in a May statement. “With these stakes in mind, PMA and its members are focused on delivering a contract that ensures the West Coast’s standing as the gateway of choice for goods sent to and from Asia.”

Fresh produce shippers in the region would have few or no realistic options if there’s a slowdown or stoppage.

“There might be some service out of British Columbia,” Gilliland said. “Other than that, you’ve got gulf ports. I don’t see that as a practical alternative. You also don’t know what the carriers will do with their schedules.”

A contract-related stoppage lasting 10 days or more is unusual. The last one, 10 days, came in 2002 when management locked out West Coast dockworkers until President George W. Bush ordered the sides back to work under the Taft-Hartley Act.

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