By Tom Curry, November 24, 2014, Roll Call
It’s Christmas shopping season; do you know where your gift is in the supply chain?
For some people, gifts may be delayed by the congestion and long-running contract negotiations at West Coast ports.
Theodore Fick, CEO of the Port of Seattle and John Wolfe, CEO of the Port of Tacoma, sent a letter to President Obama Friday urging him to appoint a mediator to settle the dispute which has lasted since May.
Mediation is “critical and necessary,” they said, because the Pacific Maritime Association and the International Longshore and Warehouse Union (ILWU) have failed to come to terms.
Shippers “have diverted their cargo to non-U.S. ports, resulting in the loss of American jobs to foreign competitors,” the two port CEOs said.
The PMA charges that the ILWU is deliberately slowing down work at the ports.
PMA spokesman Wade Gates said Friday “these negotiations are of the utmost importance and should continue at full strength until the Thanksgiving holiday.”
But ILWU Craig Merrilees said Monday that “progress is being made” and “negotiations are continuing.” The two sides are meeting in smaller working groups, he said.
The ILWU has said that an array of factors outside the control of the union are causing congestion at the ports including a shortage of truck chassis, freight rail delays, (caused in part by the booming oil traffic), and drayage drivers (who carry goods out of the ports and into inter-modal facilities or distribution centers) quitting because they can’t make a living wage.
Leslie Blakey, executive director of the Coalition for America’s Gateways and Trade Corridors, a coalition of port authorities, state and local transportation agencies, and infrastructure firms, said last week that the larger problem is a goods-movement infrastructure which is overwhelmed and allows little margin for error.
“Even the slightest problem creates stress for the system,” she said.
She added that the West Coast congestion has reduced the turn times for the drayage drivers and is serious enough that “you really can’t make a living right now because you can’t get in and out of the port and to your destination, and then come back and pick up another load quickly enough to make it profitable.”
Shippers and retailers made contingency plans months ago to cope with the West Coast problem, in some cases shifting shipments to Canadian ports, or moving up the date of shipments for goods needed by Dec. 25.
The U.S. West Coast ports could stand to lose in the long run.
Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, said the congestion may prompt shippers to ask whether they want to ship through U.S. West Coast ports in the future or whether they’d be better off using ports such as Prince Rupert in British Columbia or shipping through the newly expanded Panama Canal, which is set to begin operations in 2016.