I’ve written before about the shortsightedness of the International Longshore and Warehouse Union when it comes to dragging out contract talks with the marine terminal operators to the point they impact other industries and jobs that depend on the ports to sell their goods.
There may be some short-term gain to playing hardball on bargaining positions ranging from wages, benefits, health care, technology implementation, and jurisdiction over chassis repair and arbitration. But the long-term damage from cargo diversion by fed-up shippers could outweigh any benefit.
Peter Friedmann, the outspoken and hard-driving executive director of the Agriculture Transportation Coalition, issued a similar warning in one of his frequent e-mail updates on the deteriorating situation at the clogged West Coast ports.
Farmers and agricultural producers are hurting badly because of massive port delays. The ag industry has already lost hundreds of millions of dollars in reduced exports, spoilage and storage fees. The economic suffering is palpable because many shippers are small, family operations that cannot sustain weeks of reduced revenue.
“In a strange way, the ILWU and the agriculture exporters are in the same boat. If this situation is not resolved in a manner that will make U.S. West Coast ports MORE automated, MORE efficient and LESS expensive, then less agriculture will transit West Coast docks, and fewer longshore jobs will be needed,” Friedmann wrote.
“One fears that the ILWU has been so successful over the years in gaining the highest compensation and benefits and pension package of any organized labor force in the U.S., that it may no longer be sustainable, as there are not enough longshore jobs to generate the contributions to pay for the pensions and benefits of the retirees.
“So the ILWU may not have any choice but to oppose automation, just as other unions have done in the past—elevator operators fighting self-operated elevators, policemen opposing traffic lights—because they need the job counts.
“And the ILWU has been successful. Today, U.S. ports are the least automated in the developed world, with the highest labor to capital investment ratio. But this ‘success’ will be short-lived, as cargo interests continue to shift their cargo supply chains away from West Coast ports. Less cargo means fewer jobs, not more. So both the ILWU and the ag exporters will be the losers, as foreign customers will be forced to buy their ag from other countries,” he explained.
And union behavior has contributed to the motivation of terminals to gain efficiency through technology, the very thing the longshoremen apparently want to avoid, according to one former maritime industry executive.
Terminals would face less pressure to automate if unions did a better job of policing their members to make sure nobody slacked off and undermined productivity, James Devine, who retired last year as chief executive officer of New York Container Terminal, said at a port conference before the holidays.
“Some percent of the workforce tries to get over and do as little as they possibly can. And that’s what drives the automation for some people,” he told American Shipper for an online story in February. “Get rid of this guy because he’s sitting at his desk playing a word game and he’s not attending to the gate. If the guy was doing his gate job, you wouldn’t have to spend the money [on technology], and he would have protected his job.”
Many blue-collar workers around the country are ticked off at the ILWU protecting its skin at their expense. I heard it from callers when I was a recent guest on the Sirius/XM “Road Dog Trucking” channel and in this screed from an anonymous shipper provided by Friedmann:
“There is no compassion or sympathy here for union members who are paid so much more than any of us make. They are responsible for this mess. We need that port operating at full capacity, and the current port union leadership needs to realize that their job is important to the economic health of the Pacific Northwest and America in general, and set aside petty politics and personal greed while working out this situation.”
This commentary was published in the March 2015 issue of American Shipper.