Port of Portland Will Pay $10 a Container to Retain Shipping Lines as Longshore Dispute Sails On

By Richard Read, January 9. 2013, The Oregonian

The Port of Portland will pay shipping lines $10 a container to keep sending cargo vessels here despite longshore labor disputes that started last spring and drove up costs.

Port commissioners voted 7-2 Wednesday in favor of the payments to ocean carriers, up to a total $1 million, on top of subsidizing the company that operates Portland’s embattled container yard.

The West Coast longshore union quickly condemned the payments, and denied responsibility for slowdowns at the North Portland terminal. The Port is squandering public resources and scapegoating union members, who continue to work productively, longshore leaders said.

But Bob Coleman, president of the Columbia River Customs Brokers and Forwarders Association, welcomed the incentive program, calling it a last-ditch attempt to keep Portland’s container port open. Coleman, business development director at Allports Forwarding Inc., which books freight, blamed longshore workers for slowing container movement and jeopardizing port operations.

“It’s because they’re lazy, they’re slowing down and they’re flexing their muscle,” Coleman said. “When they get tired of working, or they want to take a break, they call a safety issue.”

The controversy stems from a dispute that broke out last summer, pitting the International Longshore and Warehouse Union against the Port and its terminal operator, ICTSI Oregon Inc. The longshore union claimed the equivalent of two jobs plugging, unplugging and monitoring refrigerated containers, or reefers, handled for many years by the International Brotherhood of Electrical Workers.

Productivity — measured by the number of containers moved an hour on and off a ship — plunged in July as trucks backed up, cargo foundered and ships bypassed Portland. ICTSI and the Port blamed the union for slowdowns, which they say continue to some extent.

Union leaders attributed delays to equipment breakdowns and mismanagement by ICTSI. They said the dispute concerned far bigger issues than two jobs, claiming ICTSI was bucking the West Coast longshore collective bargaining agreement. Litigation continues over the dispute and a Port subsidy of as much as $2.7 million to ICTSI, a subsidiary of a Philippines company that began running the terminal in February 2011.

Port managers want to keep carriers including Hanjin Shipping of South Korea, and Hapag-Lloyd of Germany, calling on Portland, saying that container imports and exports support thousands of Northwest jobs in addition to longshore work. Shipping lines’ contracts with ICTSI expired Dec. 31, and negotiations continue on new agreements and rates.

Jeff McEwen, Hanjin’s Portland manager, declined to comment Wednesday on those talks. But he welcomed the $10 carrot from the Port, which isn’t much compared to the $200-$300 shipping lines pay to move a container through a West Coast port.

“We were encouraged by the Port’s proactive action,” McEwen said.

But a longshore union statement criticized the program, which was approved by all Port commissioners except Bruce Holte, of longshore union Local 8, and Tom Chamberlain, president of the Oregon AFL-CIO. Jennifer Sargent, a union spokeswoman, released the statement, which called the $10 payments “bribes.”

“The Port and ICTSI are scapegoating workers for variations in productivity that are beyond the workers’ control,” said the union statement, adding that productivity depends on vessel types, management decisions and other factors. “The men and women on Portland’s docks have worked productively to make the Port successful for decades, and they continue to do so today.”

Elvis Ganda, ICTSI Oregon chief executive officer, said the union neither explained the low productivity nor suggested ways to keep shipping lines coming to Portland.

“There has been a deliberate and continuing effort on the part of the union to interfere with production and to run the ocean carriers out of Portland,” Ganda said in a written statement, “despite the untold benefits to the regional economy that flow from a productive and successful container operation at Terminal 6.”

The longshore union is also involved in a standoff with owners of Northwest grain terminals, where dockworkers continue working without a contract under terms union members rejected in a vote last month.

A separate longshore union on the East and Gulf coasts is negotiating with employers after threatening a strike that would close ports from Maine to Texas.

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