Steve Wilhelm, April 16, 2015, Puget Sound Business Journal
Automate West Coast ports and replace strike-prone dock workers. That was the suggestion of Bill Mongelluzzo, senior editor of New Jersey-based Journal of Commerce, who spoke before a Port of Seattle annual breakfast this week.
The increasing size of cargo ships and fallout from the months of labor strife between longshore workers and employers will make it difficult for Puget Sound ports to do anything to prevent the steady loss of market share, Mongelluzzo said.
“The reputation of West Coast ports now is in the gutter,” he said. “I hear it all the time from folks who control cargo. They have a keen loathing for the West Coast and labor contracts there.”
Mongelluzzo laid most of the blame for the months of cargo slowdowns on the International Longshore and Warehouse Union, arguing they weren’t concerned enough about the impacts on the economy.
“There were work stoppages and slowdowns for four months, November through Feb. 20, that did not have to happen,” he said.
Dan McKesson, president of ILWU Puget Sound District Council, fired back, pointing at terminal operators. They caused many of the slowdowns by not allowing longshore workers on the docks, he said.
“For six days our guys were sent home every day after six hours,” he said.
The months of labor strife ended in February, when, under federal pressure, the longshore workers and the Pacific Maritime Association, which represents ocean carriers, reached a settlement agreement.
In addition to the labor dispute, Mongelluzzo said the increasing size of ships handicaps Puget Sound ports by drawing cargo away.
A ship capable of carrying 14,000 containers can reduce the per-container cost by 60 percent compared to older ships a third the size. That is the key reason operators are now ordering ships carrying 20,000 containers, he said.
The bad news for Northwest ports is that owners are operating the largest ships out of Southern California ports first because of the large population in the Los Angeles basin. The better economics of the larger ships then attract more cargo.
Mongelluzzo said automation may be the answer for West Coast ports recovering cargo because it will free terminals from the impacts of labor actions, and also because automated terminals can be run more efficiently.
“An automated terminal is what the ultimate answer will be to productivity problems, and future of labor relations in the West,” he said.
As an example, he described one Southern California cargo terminal that kept operating during the worst of the labor problems this fall.
Port of Seattle Seaport Managing Director Linda Styrk tried to cool reactions to Mongelluzzo’s comments, indirectly addressing the longshore leaders who were there.
“My experience has been with ILWU leadership in Puget Sound,” she said. “I think these guys understand the supply chain…and they understand the balance between interest in automation, which is very costly, and productivity that can be maintained through more traditional methods.”