Negotiations between shipping lines and terminal operators and the West Coast Longshore union is yielding little progress toward ending a cargo slowdown that is affecting trade both in the United States and Asia, a shipping industry group declared Wednesday.
“Statements and rumors that our negotiations are ‘close’ to a final contract are not true,” the Pacific Maritime Association declared in a news release Wednesday afternoon. “Even after seven months of negotiations, we remain far apart on several issues, and the union slowdowns continue to disrupt the movement of cargo through the ports. Business is being lost, and we are concerned that the damage is permanent, and shippers will be fearful to put their trust in the West Coast ports going forward.”
Some outside observers had hoped that the union, the International Longshore Workers Union, would emerge with new proposals after its leaders from locals up and down the West Coast met for a caucus this week in San Francisco, but so far little has changed in the stalemate between the union and employers. The slowdown, which began on Halloween, includes the ports of Tacoma and Seattle.
The trickle of cargo moving through the West Coast ports is beginning to have a marked effect on both sides of the Pacific.
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McDonald’s has begun rationing french fries to customers of its 3,100 outlets in Japan, reported The Associated Press. The restaurant chain is limiting the quantity of the fried potatoes to small sizes in meal deals that include an entree and a soda. The restaurant is cutting its prices on those meals because of the smaller quantity of fries available.
McDonald’s sources most of its frozen french fries from producers in Washington, Idaho and Oregon. Some of those producers, including major suppliers such as Simplot and ConAgra, have cut hours at their processing plants because they can’t get the frozen fries to Asia because of the port congestion.
The restaurant chain shipped an emergency supply of 1,000 tons of frozen potatoes to Japan by air, but that wasn’t enough to meet regular demand. McDonald’s told The Associated Press it has begun shipping the potatoes through alternate ports.
Peter Friedman, executive director of the Agriculture Transportation Commission, said some Idaho potato producers are beginning to use the port of Houston to export their products.
Friedman said the labor dispute — the union and the PMA have been without a contract since July 1 — is threatening business all along the West Coast and in Asia.
Hay producers in Eastern Washington who provide fodder for horses in Japan and Korea have dozens of containers sitting on the docks awaiting space on container ships headed across the Pacific.
Apple growers, counting on Asian customers to buy a large share of this year’s record Washington crop, are finding domestic prices for apples dropping as growers dump them on the domestic market.
Rice processors in California are finding Asian customers overseas turning to other suppliers for that basic Asian staple.
And lumber producers in the Pacific Northwest are finding their valuable Asian markets inaccessible, said Hayden Swofford, executive director of the Pacific Northwest Asia Shippers Association. The association represents Northwest forest products producers.
The failure of the transportation system is hurting lumber retailers in Asia as well as producers in the U.S., he said.
A major lumber yard in Tokyo, he said, is now down to a five-week supply of lumber, a record low.
“If this goes on much longer,” he said, “I expect bankruptcies on both here and in Asia,” he said.
Friedman said even if the slowdown is settled soon, some customers may have abandoned American suppliers for good.
“There are a lot of other places they can get the goods they need, from Argentina, from Australia, from Europe,” he said. “They may never do business with us again.”
Friedman blamed the union for the stalemate.
“The longshoremen are killing off the jobs for their own kids,” he proclaimed.
The union says the blame isn’t theirs. The shipping companies have mismanaged the transition to larger ships and have created shortages of the over-the-road chassis used to carry the containers by selling those chassis to leasing companies, the union has said.