Jan. 20th, 2015

US West Coast waterfront employers say ILWU slowdowns continue

 

Longshore contract negotiations on the U.S. West Coast have degenerated into a war of attrition in which the union’s work slowdowns have significantly increased operating costs for shipping lines and terminal operators, and the employers are countering by reducing work opportunities for rank-and-file longshoremen.

 

Caught in the middle are the ports, whose reputations have been tarnished, truckers, who sit idle in long lines, often without compensation, and cargo interests, whose cost of shipping through the West Coast has skyrocketed.

 

Conditions are so bad that some employers say the only way to stop the bleeding is to lock out the union as they did in the 2002 contract negotiations. However, those employers are still outnumbered by others who say that everyone will lose in a lockout, and a war of attrition is the better option.

 

The contract negotiations, which began on May 12, are now in their ninth month. Shipping lines and terminal operators, who are represented by the Pacific Maritime Association, can no longer afford the increased operating costs that result from work slowdowns by the International Longshore and Warehouse Union. According to numbers published each week on the PMA website, terminal operators are paying 15 to 20 percent more man-hours than they did in the same weeks last year, but cargo volumes are up only about 1 to 3 percent, depending upon the port range.

 

Shipping lines are suffering as well because vessels are taking as long as one week to work, when cargo should be discharged and loaded in no more than three days. Carriers say they lose at least $50,000 each day that their vessels are idle. According to the Marine Exchange of Southern California, seven containerships were at anchor Tuesday awaiting berths. In Oakland, the port reported that eight container ships were at anchor.

 

The strategy of ILWU negotiators apparently is to make the hard-timing so costly for individual employers that they will cave in to the union’s demands on unresolved issues involving automation, and also jurisdiction over chassis maintenance and repair. The ILWU hopes the individual companies will pressure PMA negotiators to grant the union’s demands. Last month, ILWU President Bob McEllrath said the negotiations would reach a successful conclusion only when shipping lines became directly involved in the contract talks.

 

Employers have taken the offensive by cutting back on work opportunities for longshoremen. Terminal operators in Seattle and Tacoma have not opened for night shifts for several weeks now. Oakland’s terminals no longer work vessels at night, although they continue to employ longshoremen at night to organize containers in the yards. When longshoremen refuse to dispatch enough workers, especially equipment operators, to fill a gang, employers dismiss the gang within one hour so the workers don’t have to be paid.

 

Terminal operators in Los Angeles-Long Beach caused a stir on New Year’s Eve when they informed the ILWU locals in Southern California they were reducing the number of vessel work crews at night to one, from the three 45-member gangs that had been loading and unloading ships. Employers went a step further on Monday when they informed the ILWU locals that beginning today there would be no gangs hired to work vessels at night, although yard and gate operations would not be affected.

According to letters from the PMA to the ILWU locals, these actions make good operational sense. PMA stated that since the ILWU in Southern California on Nov. 3 unilaterally decided to reduce from 110 to 35 the number of skilled yard crane operators that would be dispatched each day, the container yards had become so congested there was no space left to accept additional containers at night. Therefore the terminals would stop discharging containers from the ships at night, and would use the night shift to relieve congestion in the yards.

 

PMA spokesman Steve Getzug said Tuesday that reasoning is still valid. “Our sole rationale for the adjustments in night operations at L.A. and Long Beach is to free up crane drivers to clear the yards. It’s that simple.”

 

However, at least in the thinking of some employers, reducing work opportunities at night at all of the ports also hits the rank-and-file longshoremen in their pocketbooks. Many longshoremen like nightwork, which carries premium pay, and they reportedly care very little about the union negotiators’ stance on chassis maintenance and repair, which is one of the issues preventing negotiation of a new contract.

ILWU negotiators want the PMA to guarantee the union M&R division, which accounts for about 10 percent of the ILWU membership, the right to inspect every chassis before it leaves the terminal. This is no longer possible because the shipping lines sold their chassis to equipment leasing companies, and those employers are not members of the PMA. ILWU negotiators want jurisdiction over “red-lined” terminals that years ago signed M&R contracts with other unions such as the International Association of Machinists. The PMA can’t make any such guarantee because they have no control over those contracts. ILWU negotiators want PMA to grant the ILWU M&R jurisdiction at off-dock locations run by the chassis-leasing companies, but the PMA has no jurisdiction over the off-dock sites.

 

Some rank-and-file longshoremen are reportedly upset over losing work opportunities on the night shifts because union negotiators are holding up contract approval over M&R work that is performed by ILWU mechanics. Employers hope that those general longshoremen pressure the ILWU negotiators to back off on chassis demands that the PMA can not grant even if the employers’ group chose to do so.

Just as the PMA will not discuss bargaining strategy, the ILWU does not do so either. In recent statements, and in letters to the PMA, the union has attacked he employers’ decisions to cut back on night work as being bad for productivity at the ports.  In a letter Monday to the PMA, the president of the three ILWU locals in Southern California said the decision to cease all vessel operations at night would not improve productivity.

 

“There is no evidence that there has been any effort to reallocate labor to clearing the yard,” said Bobby Olvera, president of ILWU Local 13. “We ask you to reconsider this unilateral action. It is not a sound management decision and will inflict direct damage on the industry and to retailers large and small. In the interim, ILWU Local 13 will continue to fill any orders for night-side vessel gangs it receives,” Olvera said.

Meanwhile, the war of attrition continues. The PMA, in a release on Monday, said: “The ILWU slowdowns and the resulting operational environment are no longer sustainable. The PMA has alerted the local port authorities to the deteriorating situation on the docks.” The PMA said that statement should be taken at face value, meaning the terminals are approaching complete gridlock. Others say is a not-so-subtle warning that if the slowdowns continue, the voices within the PMA calling for a lockout of the ILWU will get louder and will soon outnumber those who oppose a lockout.

 

It is generally agreed that no one wants a lockout. Rank-and-file longshoremen would receive no paychecks because they won’t be working. Terminals will forego revenue because they won’t be lifting containers on and off of ships, and shipping lines will lose thousands of dollars a day because their vessels will sit idle at anchorage. Furthermore, a lockout and the inevitable Taft-Hartley injunction that would follow would only prolong the agony because the work slowdowns would most likely continue.

 

On the other hand, cargo interests and shipping lines based in other countries seek action after eight months of inaction in the negotiations, and rank-and-file longshoremen are seeing their earnings diminish each week as employers reduce their hours, so each group is pressuring its respective negotiators to end what they consider to be complete nonsense.

 

 

 

Jan. 29th, 2015

US West Coast waterfront employers say ILWU slowdowns continue

 

Vessels are backing up at an alarming rate at West Coast ports due to congested marine terminals and work slowdowns by the International Longshore and Warehouse Union.

 

The Marine Exchange of Southern California reported Wednesday that 17 container ships were at anchor and awaiting berths in Los Angeles-Long Beach. Oakland reported that five container ships were at anchor, and Tacoma reported six at anchor.

 

This is a dangerous condition because vessel backlogs upset the weekly scheduled sailings from Asia to the West Coast, and that has a cascading effect throughout the market. The Paris-based consultancy Alphaliner reported this week that vessels have been thrown off schedule by as many as three weeks, forcing carriers to add 36 additional ships to their trans-Pacific rotations to the West Coast. Furthermore, some carriers are running “extra-loaders” on all-water services to the East Coast. These unscheduled, single-voyage vessels carry cargo that would otherwise have moved through the West Coast.

 

Port congestion on the West Coast has been building since last summer, and Alphaliner said that it is now the “worst-ever case of U.S. port congestion on record,” an observation that’s hard to argue with.

 

Meanwhile, contract negotiations between the ILWU and the Pacific Maritime Association are on-going and were continuing all day on Wednesday, said ILWU spokesman Craig Merrilees. Negotiations began on May 12, 2014. The ILWU has been working without a contract since the previous agreement expired on July 1.

 

West Coast ports have struggled with mounting congestion since last summer. A number of factors contributed to the problem, including big ships operated by carrier alliances that generate huge container volumes in a single vessel call. In Los Angeles-Long Beach, the largest vessels generate as many as 10,000 container moves per call. Since the vessels carry containers from as many as six different carriers, the containers are spread out over multiple terminals, creating a logistical nightmare for truckers and equipment providers. Chassis shortages and dislocations and service issues on the transcontinental rail networks compounded the congestion problems.

 

Port congestion deteriorated rapidly at the end of October when the ILWU implemented work slowdowns in Seattle-Tacoma and Oakland. The PMA said the slowdowns were orchestrated by the union to exert leverage in the contract negotiations. In Los Angeles-Long Beach, the ILWU cut down the daily dispatch of skilled yard crane operators from 110 to 35, bringing the largest U.S. port complex to near gridlock, the PMA has stated.

 

The ILWU blames the gridlock and backlog of vessels at anchor on two issues -- pre-existing port congestion since last summer and a decision by employers late last year to suspend all night shifts at Seattle, Tacoma and Oakland, and to suspend vessel unloading (but not yard and gate operations) on the night shifts in Los Angeles-Long Beach.

 

The PMA said that since terminals in Southern California are operating at 95 to 97 percent of capacity, employers decided to suspend vessel unloading on the night shifts in order to clear out some of the container backlog in the yards to make room for containers to be discharged on the next morning when vessel unloading resumed.

 

Contract negotiations in San Francisco have been held under the auspices of the Federal Mediation and Conciliation Service since Jan. 6. A possibly significant breakthrough was made on Monday when the PMA confirmed that a tentative agreement had been reached on the issue of ILWU jurisdiction over container maintenance and repair. That issue had been holding up the negotiations since the beginning of the year.

 

However, other issues such as wages, pensions and the length of the new contract must still be resolved.

 

The congestion is also showing up in diversion of cargo to ports in Canada and on the U.S. East Coast. Container volume in Los Angeles-Long Beach declined 1 percent in December compared to December 2013, while East Coast gateways as well as Prince Rupert, Canada, were reporting double-digit growth.