A tentative agreement has been reached between the International Longshoremen and Warehouse Union (the union that represents West Coast dockworkers) and the Pacific Maritime Association (the association negotiating on behalf of the 29 ports on the west coast – from Southern California to the Pacific Northwest).
For agriculture, it’s a huge sigh of relief for the millions it has cost the industry. The disruption on the West Coast is costing U.S. exporters of agricultural products $1.75 billion each month. The American Meat Institute and the National Pork Producers Council claim that the West Coast delays are costing each industry $40 million per week. One Iowa hog producer said lower prices as a result of the West Coast situation have required a $1.8 million drop in the value of his hogs.
Just a day before the agreement was reached, Secretary of Agriculture Tom Vilsack said that 95% of the dispute had been settled, but the remaining “issue is over one 64-year old arbitrator.” The arbitrator is on-call on a daily basis and arbitrates disputes from time to time in the operation of the ports. Vilsack explained one of the current arbitrators is a former union member but one who also has close business relationships with members of the board of directors for the companies.
“There is a perception that his decisions have not been as fair as they should be and folks want to change that system,” Vilsack said.
In announcing the decision, U.S. Secretary of Labor Thomas Perez said that ports along the West Coast will resume working “fore bore” Saturday in order to clear the backlog in container traffic.
The North American Meat Institute estimated it could take an additional 30-45 days to clear the backlog of containers that has built up at the ports.
The contract dispute might be settled, but the ripple effects will keep flowing for months, possibly years from what occurred.
A statement from U.S. Meat Export Federation president and CEO Philip Seng said that since they began seeing increased congestion in the West Coast ports several months ago, “the global customer base that the U.S. meat industry has spent decades buildings has been put at risk by shipping delays and by the uncertainty surrounding these contract negotiations.”
Mike Steenhoek, executive director for the Soybean Transportation Coalition, shared that they’re hopeful the severe backlog of cargo can be quickly relieved. However, more importantly, he hopes that the U.S. reputation as the world’s most reliable supplier of agricultural and other products can be quickly restored.
“The reality with good reputations is that they take years to accumulate and moments to evaporate,” Steenhoek said. “U.S. agriculture remains able to earn the business of our international customers. We are hopeful that our West Coast ports will facilitate this process and no longer be an obstacle to it. If we truly want to be the world’s preeminent exporters of agricultural and other products, we need to have a system of ports, including those dockworkers who service them, committed to this goal as well.”
NAMI also suggested that Congress and the White House look for ways to avoid this situation in the future, “otherwise the situation will be repeated in both 2017 and 2019 when both coasts’ labor contracts expire once again.”
I read a great blog questioning whether business at the port had to vanish in the first place. Ted Sheely, a California farmer who saw his pistachio crop held up in the containers taken hostage, explained, "A country that seeks to partake as a reliable partner in global trade shouldn’t fall hostage to a labor dispute."