transportationreport PORTS
Maritime Alliance (USMX), which
represents waterfront employers,
over a new contract to replace the
current pact that expires Sept. 30.
The ILA represents 30,000 longshore workers on the East and Gulf
Coasts, the Great Lakes, Canada,
and Puerto Rico.
The two sides exchanged general
proposals in late March and at press
time, were scheduled to meet in
Delray Beach, Fla. In the interim,
there have been no formal negotiations but plenty of rhetoric.
At the center of the storm is ILA
General President Harold J.
Daggett, a third-generation ILA
member and a 45-year association
veteran. An imposing and forceful
personality right out of central cast-
ing, Daggett has warned for the past
few months that a work stoppage is
very possible as long as employers
refuse to guarantee longshore work-
er jobs in return for the group’s
acquiescence to the increased use of
automation at the ports.
TEMPEST IN A TEAPOT?
In theory, a dockworkers strike
seems far-fetched. In a sluggish
economy with elevated unemployment levels, it is unlikely dockworkers would be motivated to walk off
of—or want to be locked out of—
jobs that offer generous wages and
benefits.
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Should the game of chicken continue
into the late summer, the Obama administration may seek a national emergency
injunction under the Taft-Hartley Act, a
1947 labor law, to effectively force labor
back to work rather than allow a job action
to further damage an already-fragile economy in a presidential election year.
For now, importers are mostly keeping
mum. Mark Q. Holifield, who runs the
global supply chain for mega-retailer The
Home Depot Inc., declined comment other
than to say that “in the normal course of
our business, we monitor freight flows,
capacity, and trends daily, and take appro-
priate actions to optimize our supply
chain.”
Tim Feemster, senior managing director
at industrial property and logistics firm
Newmark Grubb Knight Frank, said in a
June 8 e-mail that it is too early for cargo
diversion to occur. “The next few weeks will
give us an early warning as to the tenor of
the talks,” he said. “We will not see the
impact at the ports, or [in] the volume for
the Western railroads, for another six to
eight weeks.”
Yet no shipper or importer is likely to
wait long for both sides to reach an agree-
ment, or for the White House to step in to
end an impasse. Importers receiving goods
into the East Coast from Asia and Europe
have become concerned about possible
service disruptions in the ILA’s territory
and have begun weighing plans to shift
deliveries to West Coast ports to avoid any
problems.
They are also looking at the possibility of
advancing inventories of potentially
strong-selling holiday items so they are
guaranteed to be resting in U.S. commerce
no matter what happens at the bargaining
table.
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DIVERSIONARY TACTICS
Experts say the time to begin planning is
now, especially while West Coast ports are
underutilized and there is ample containership capacity on the water with only about
3 percent of the global fleet sitting idle.
Sappio of Alvarez & Marsal, who spent
nearly 30 years at ship giant APL, said companies looking to shift deliveries to West
Coast ports should secure vessel slots no
later than the end of July. “If contract dis-
