Steve Wilhelm, April 28, 2014, Puget Sound Business Journal
Port and maritime leaders are closely watching developments with the West Coast’s longshore union, worried that any labor issues around the contract that expires June 30 could divert cargo elsewhere.
The International Longshore and Warehouse Union is one of the most powerful unions in the country, with the power to shut down cargo movements over the West Coast.
Even the possibility of labor unrest is making the owners of cargo, called shippers, feel nervous. While the actual ILWU contract is coast-wide, the Puget Sound area may be especially vulnerable, because most of the containers moving through the ports of Seattle and Tacoma are “discretionary” cargo for inland destinations and could be routed elsewhere.
“The worst thing that could happens would be a strike or a lockout,” said Bruce Carlton, president of the National Industrial Transportation League. “There would be shippers out there saying, ‘Fool me once, shame on me; fool me twice and I’m out of here.’”
Carlton said that shippers around the country, many of whom also move cargo through the East Coast, are feeling skittish.
“Shippers are a little worn out on this subject, because last year we went through this on the East Coast. It was pretty bombastic,” he said. “There was never a strike, never a lockout, but lots of angst.”
The biggest issue in recent memory was in 2002, when a contract dispute resulted in slowdowns at the docks and a lockout.
“ILWU chose to slow walk the work, and management locked them out, and ships started backing up halfway to Hawaii,” Carlton said. “It took weeks to undo the damage that was done … There was some permanent damage to West Coast ports. Some shippers decided they were not going to risk that again, and for those who had flexibility in their supply chains, they made permanent changes to take their business elsewhere. Not huge numbers, but it happened, and they never came back.”
At the Port of Seattle, Co-President Stephanie Bowman said they’re closely watching the situation, although there’s no immediate threat.
“Given the walkout in 2002, certainly the largest big-box retailers started to hedge their bets,” she said. “The good news is we have not yet seen that, and our folks at Port of Seattle are watching it very, very closely. We haven’t seen any inkling of labor unrest.”