NRF calls for the need for new thinking and approaches between PMA and ILWU

Just because a new five-year labor contract between the Pacific Maritime Association and the International Longshore & Warehouse Union is a done deal does not, by any stretch, ensure that that problems that led to months of uncertainty for shippers moving cargo through West Coast ports are gone.

Looking at the positive side, the fact that a new deal is in place is key to be sure. With the parties working without a deal for nine months prior to a tentative agreement being reached in late February, there were more than a fair share of issues, ranging from congestion to what some called deliberate union slowdown tactics that left shippers skeptical about the motives and tactics the ILWU, according to various reports.

As noted by my colleague Patrick Burnson last November, a period that could be viewed as the peak for the conflict between PMA and ILWU, labor slowdowns at the ports of Seattle and Tacoma resulted in terminal productivity being reduced by an average of 40 to 60%. For example, terminals that typically move 25-35 containers per hour were moving only 10-18, according to statistics compiled by PMA in tracking historical productivity based on the number of containers moved per hour for each vessel at the same terminal.

That is an example of things that were occurring when prospects of a new deal were not apparent.

Well, with a deal in place, at least for the next five years, there are many industry stakeholders that want to ensure we are not in the same predicament, again, when the new deal expires.

A recent statement from the National Retail Federation, featuring comments from its Vice President for Supply Chain and Customs Policy Jon Gold succinctly offers up the thoughts of retail shippers to be sure.

“Shippers can rest a bit easier knowing that the West Coast ports will be more stable over the next few years,” said Gold. “While we are happy to see the contract ratified it’s not going to be long before we are go through this process all over again.

Gold explained that the past year was replete with disruptions, slowdowns and partial shutdown, which can no longer be the norm, saying ports must adapt to ensure they provide shippers with the predictability and stability they need.

“We can no longer accept last-minute negotiations and months and months of talks while slowdowns and stoppages disrupt the global supply chain and international trade,” he added. “Negotiators need to begin their talks early enough to have an agreement in place well before another contract expires without active or passive threats to the economy and the millions of jobs dependent on our nation’s ports and supply chain. The current process is impractical and unsustainable and fails to meet even the most basic requirements of a modern, global supply chain. A new process is needed for labor and management on both coasts. Stakeholders cannot afford to go through this process every couple of years. We need a new system in place that benefits all parties and provides for the efficient transportation of the nation’s cargo and commerce.”

Gold pretty much nails the mostly untenable situation that impacted myriad supply chain stakeholders over the last year, with an eye on the future that clearly is needed.

What’s more, he does it in a way that speaks to both the PMA and ILWU, underscoring the need for cooperation and progress between the parties.

This is a logical and sensible approach, not one with an ax to grind one way for the other. It is an approach that screams for the need to work together and come up with a plan that makes sense and works, not one which severely crimps port productivity and comes with heated barbs via the press and the Internet.

That is what should be viewed as constructive and productive, as opposed to, say, going after one party or another for reasons only germane and beneficial to one party.

During the negotiating period and still now, there is speculation that some cargo may make a permanent shift to East Coast ports, coupled with increased throughput the Panama Canal eventually, too, and many shippers also came up with contingency plans to get their cargo in as timely as a manner that the situation would allow. In other words, they assessed their situation and made what they felt was the best logical move, which was their best play. Disrespecting and throwing each other under the bus is not part of that playbook, and it does not figure to be anytime soon.