Damage to US exports from West Coast gridlock, trade group says

Bill Mongelluzzo, January 28, 2015, JOC.com

U.S. exports of several agricultural products including pork, beef, poultry, apples and forage products are shrinking, and some export opportunities could be lost permanently because of dockworker slowdowns and the gridlock that has emerged at West Coast ports, the Agriculture Transportation Coalition reports.


The damage ranges from canceled orders to produce rotting in the fields to the potential loss of newly opened export opportunities in Asia for pork, beef and apples, said Peter Friedmann, AgTC executive director. The culprit is labor actions associated with the contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association.


The loss of export opportunities isn’t just tied to the current negotiations that began last May, but, in fact, has been building for the past two years because of earlier longshore job actions. “The ILWU walkoffs did not just start in the past four months when this contract negotiation became stalemated. Every U.S. West Coast port has been struck, closed by labor actions over the past two years — from one morning shift in Tacoma, to two five-consecutive days in LA-Long Beach — and repeatedly,” he said.


The comments amounted to a broader attack on the ILWU and its dominance over longshore labor at West Coast ports.


According to PIERS, the data division of JOC Group, exports of pork, poultry and beef combined through West Coast ports were down 4 percent during the September-November period, versus the same period in 2013. They dropped from 35,988 TEUs to 31,277 TEUs. They were down 3 percent through East Coast ports, from 80,490 TEUs to 77,022 TEUs, according to PIERS.


Apple exports through the West Coast rose from 12,359 TEUs to 12,454 TEUs comparing the same three month periods. Pear exports rose from 12,865 TEUs to 13,040 TEUs, according to PIERS.


Some of the export opportunities that have been lost involve higher-priced commodities. “The U.S. has lost the entire fresh beef and pork markets globally because we can’t deliver in time,” he said.


Other opportunities that have newly emerged because of free trade agreements could be endangered. “The U.S. pork and beef industry, which just got access to the Korean market, has now lost it,” Friedmann said.


The losses could involve apples fresh off the trees. “The president just announced last week that China has removed its barriers to U.S. apples. Guess what? We can’t ship apples because the port congestion/labor walkoffs make it impossible to ship apples that can get to Asia without complete spoilage. Apples can’t sit in containers, even refrigerated containers, for weeks,” he said.


Forage products that are consumed by animals are also threatened. “Japan’s Ministry of Agriculture has written the U.S. Department of Agriculture stating alarm with the lack of dependable supply of forage (hay for cattle and horses),” he said. Japanese authorities said they have reopened purchases from New Zealand.


While it is impossible to predict how long these lost export opportunities will last, precedent indicates that some could be lost permanently. Friedmann cited the inability of Japanese candy makers to receive almond shipments during the 2002 contract negotiations. That disruption began with ILWU work slowdowns, followed by a 10-day employer lockout. Japanese candy makers began to purchase almonds from Turkey, and to this day they shun California almonds, he said. There are forces within the employers’ organization today who are urging a lockout if the ILWU work slowdowns continue.


These lost exports are occurring at the same time that Asia’s middle class is growing rapidly to become the largest overseas export market for the U.S., especially for the high-value food products that American farmers and ranchers specialize in, Friedmann said.


Work slowdowns and poor labor productivity could reduce work opportunities for longshoremen, and may also motivate waterfront employers to invest in the automation that the ILWU fears, Friedmann said.


“In a strange way, the ILWU and the U.S. agricultural exporters are in the same boat. If this situation is not resolved in a manner that will make U.S. West Coast ports more automated, more efficient and less expensive, then less agriculture will transit West Coast docks, and fewer longshore jobs will be needed,” he said

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