So your plan is to convince the vast community of shippers and shipping lines that your two Northwest ports, just two of many options for sending goods to and from North America, represent a reliable, efficient and cost-effective channel for accomplishing that.
Here’s a great way to get that message across: Double down on the delays and costs generated by congested and snarled land routes to and from the ports with a labor-contract-related labor slowdown.
Should work out just fine.
We brushed this topic two Sundays ago, but it’s worth revisiting in light of some news events of the past week, as well as an event that didn’t occur — namely, resolution of the continuing dispute between the Pacific Maritime Alliance and the International Longshore and Warehouse Union.
The ILWU, which represents workers, clerks and foremen along the West Coast, has been working without a contract since July 1. In early November the PMA, whose 72 members include cargo carriers, terminal operators and stevedoring companies, reported that productivity at the ports had slowed, causing backups of cargo trying to get to, through and out of the ports.
PMA says the slowdown is a union-implemented tactic designed to apply pressure on companies at the bargaining table. The ILWU says it is “not responsible for the current congestion crisis at West Coast ports,” blaming it instead on multiple factors including rail service, a shortage of truck drivers, larger ships “discharging massive amounts of cargo” and the peak pre-holiday shipping season.
Whatever the cause, cargo (and not just containers but ag products) isn’t moving. The Washington Council on International Trade released a letter to President Obama this week, signed by 88 businesses and organizations including Weyerhaeuser, Costco, Brown & Haley and Tree Top, asking him to get involved in the dispute, at the least by throwing federal mediation into the fray.
“The disruptions created by the ongoing labor contract negotiations … have already cost our family farms and small to large businesses significantly during this key holiday and harvest season,” the letter says. “Lost taxes from revenues that support our community’s first responders, schools, heath, and social services will not be regained.”
What they’re worried about is that the next step won’t be settlement but escalation, in the form of a full-scale shutdown. “The threat of a West Coast port shutdown is creating high levels of uncertainty in a fragile economic climate which has forced many businesses to once again undertake contingency plans that come at a significant cost to jobs and our economic competitiveness. A shutdown now could be even more costly and we have just received word that both parties are taking a ‘break’ from negotiations rather than finalizing an agreement.”
The concern isn’t so much the stuff that’s supposed to be on retailers’ shelves for the holiday season. As efficient as the global supply chain is, it still takes time in the best of circumstances to get stuff across the water, onto trucks and railcars and into warehouses for local distribution. That merchandise, if it’s intended for Christmas, is mostly where it’s supposed to be.
What’s more worrisome is the stuff like Washington hay and produce that have their own peak seasons, as well as the manufactured goods that come and go more routinely. If a Northwest port slowdown or shutdown forces those shippers to make other arrangements — i.e., Canada, Mexico, the Gulf or East coasts, or by air if it can go that way — those temporary arrangements have a way of becoming permanent, and what comes and goes is simply gone.
And where is the vaunted Seaport Alliance in all this?
The proposed and supposed merging of the seaport operations of Tacoma and Seattle is still in formation and discussion stage. The ports did announce the 45-day review period by the Federal Maritime Commission for an interlocal agreement has passed, allowing them to get into the detail work of what the alliance is going to look like or do. A more fleshed-out plan is supposed to go to the feds for review at the end of March.
But even if it were set up, and even if it were more powerful than what’s been suggested to date, it wouldn’t be able to do much. It’s not a direct party to the negotiations, it’s a spectator. Nor can it make congestion relief on highways and rail lines immediately and magically appear, no matter how much lobbying clout the ports believe combining forces will give them.
In fact one priority item for those constructing the Seaport Alliance will be to rethink and rewrite the positioning statement for the two Northwest ports. As of now, the combination of the labor dispute’s effect and statements that the ports working in tandem can hold the line on charges to shipping lines can be boiled down to, “We can’t do anything to improve our reliability or efficiency, but we’re going to charge you more!”
How’s that going to go over as a value proposition?
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.