DC Velocity - April 2015

64 DC VELOCITY APRIL 2015 www.dcvelocity.com MARKET POWER MEANS NEVER HAVING TO SAY YOU’RE sorry. That has been the attitude of the International Longshore and Warehouse Union (ILWU) since its contract fight with the Pacific Maritime Association (PMA) broke into open warfare in late October. ILWU controls dominant shares of the U.S. containerized import and export trade flowing to and from Asia. So it would seem illogical for the union to endanger that position by throwing shippers and beneficial cargo owners (BCOs), the folks who pay the freight, under the bus.

Yet ILWU did just that. By withholding skilled yard crane drivers at several key West Coast ports, the union slowed down operations and made a difficult congestion problem at ports like Los Angeles and Long Beach, the nation’s busiest, significantly worse. Its actions disrupted import movements, causing massive backlogs. It jeopardized the livelihoods of exporters who couldn’t get their goods to foreign buyers and who now face the threat of lost business if these frustrated customers go elsewhere. It forced vessel operators to incur higher operating costs. And it lessened the appeal of the very ports where thousands of ILWU members earn their living.

As this column went to press in mid-March, a tentative contract agreement was nearly a month old. In that time, there hadn’t been any public statements of remorse from union leaders over the hardships inflicted on businesses. The joint Feb. 20 statement with PMA announcing the tentative deal did not include an apology for those affected by the mess. (PMA shares part of the blame here, as it was hardly the model of contrition itself.)

Our beef with the union is its evasiveness in denying that it deliberately staged work slowdowns. On Nov. 3, PMA announced that ILWU had begun a slowdown at the ports of Seattle and Tacoma. The union’s reply was notable in that it didn’t address the PMA’s allegations. When we contacted a union spokesman, he refused to comment beyond the language in its statement. He then abruptly hung up. Even as late as Feb. 21, the day after the tentative contract was signed, an ILWU statement announcing the agreement merely mentioned the PMA allegations in a chronology of events. It didn’t deny them.

It’s been said that, in war, the truth is the first victim. This was
war, and perhaps we will never know the truth.
ILWU maintains the congestion was caused by
ever-larger containerships and cargoes that over-
whelmed port infrastructures, poor chassis pro-
visioning, and management’s decision to reduce
night shifts. There is no doubt that problems were
present long before talks began last May. There is
also no question that congestion is caused to a large
degree by factors beyond the
union’s control. But we have to
wonder—call us naïve manage-
ment stooges if you like—why
PMA would authorize a reduc-
tion in night crews if produc-
tivity hadn’t slowed to the point
where it wasn’t worth paying
dockworkers to not move cargo
or to barely make a dent in the
box backlog. Why would PMA
not just bite but sever the hands
that feed it just to gain bargain-
ing leverage?

This we do know: ILWU’s workers are the envy of organized labor. Their work is skilled and demanding, but in return they receive solid wages, gold-plated health coverage, generous pensions, and the continued exclusive control over the maintenance and repair of outbound chassis. Maybe the cargoes that were diverted to the East and Gulf Coasts, Canada, and Mexico will return to the West en masse. But with viable alternatives out there, maybe they won’t. There are many angry shippers and BCOs who would leave the West Coast if they could. With all that on the table, if ILWU was willing to undermine its hard-won gains by squeezing customers in order to prove a point, it is indeed living in a parallel universe.