FarmPolicy

September 19, 2019

Saturday Update: West Coast Ports- Tentative Five-Year Agreement Reached

Laura Stevens reported on Friday night at The Wall Street Journal Online that, “West Coast port employers and their union came to a tentative five-year agreement on a new contract late Friday night, a union spokesman said, bringing an end to a nine-month negotiation process which resulted in significant slowdowns at the ports.”

Andrew Khouri, Chris Kirkham and Peter Jamison reported in Saturday’s Los Angeles Times that, “Shipping companies and dockworkers reached a tentative deal late Friday on a new labor contract, avoiding a shutdown of 29 ports that would have choked off trade through the West Coast.

“The agreement, which still needs approval from union members and individual employers, should start easing severe congestion that’s been building for months at the nation’s busiest ports, in Los Angeles and Long Beach, along with other major gateways.

“Details of the proposed five-year contract for about 20,000 West Coast dockworkers were not released. The dockworkers have been without a contract since July. The two sides had been negotiating since May.”

The article added that, “Trade experts cautioned that the new contract won’t immediately resolve the delays, particularly at L.A. and Long Beach, which together handle roughly 40% of the nation’s incoming container cargo.

It will take weeks, if not months, just to clear the current backlog, port officials said.

The congestion stems in part from issues unrelated to the labor dispute. Before slowdown accusations surfaced in early November, the L.A and Long Beach ports already were struggling with the worst freight backlog in a decade, in large part because of a truck trailer shortage and the increased use of mammoth container vessels that hold more cargo.”

A separate U.S. Department of Labor tweet indicated that:

Jack Healy reported in Saturday’s New York Times that, “But analysts said the deal would not immediately resolve the congestion that has cost businesses millions of dollars and left goods stranded on ships, waiting to be unloaded, or in warehouses, waiting to be shipped to Asian markets. Even as normal operations resume here at the ports of Long Beach and Los Angeles, the busiest in the nation, analysts said it would take months to clear the backlog.”

The Times article added that, “The disputes brought crippling delays that cascaded beyond the 29 West Coast ports that were affected and through the wider American economy. California broccoli, oranges and lemons bound for markets in China, Japan, South Korea or Australia began to rot in storage.”

House Majority Leader Kevin McCarthy (R., Calif.) tweeted on Friday:

And House Ag Committee Member Dan Newhouse (R., Wash.) indicated on Saturday that, “I am encouraged that a resolution to this devastating labor dispute may finally be in sight. For nine long months, the two parties held trade-dependent communities hostage by crippling the movement of goods at our ports. Even if an agreement is imminent, the domino economic effect of the port slowdown on businesses and agricultural producers will continue even after the backlog at the ports is cleared. The loss of market share and confidence of overseas trading partners will not be restored overnight, and it is appropriate to evaluate all options that would end the economic threat posed by such disputes in the future.”

“Last week, Rep. Newhouse, Rep. Dave Reichert (R-WA), Rep. Kurt Schrader (D-OR), and Rep. Jim Costa (D-CA) introduced a bipartisan resolution in the House urging an end to the contract negotiation between the PMA and the ILWU.”

House Ag Committee Member Rep. Pete Aguilar (D., Calif.) indicated on Saturday that, “I’m very pleased to hear the news that an agreement was reached between the International Longshoremen and Warehouse Union and the Pacific Maritime Association. I applaud both organizations for working together to see this through, as well as U.S. Labor Secretary Perez for assisting with negotiations. As our nation is just in the early stages of economic recovery, reaching an agreement was pivotal for the stability of California’s economy and the United States as a whole. Again, I commend both groups for their cooperation and look forward to getting our ports and trade operations back on track.”

Sen John Thune (R., S.D.) indicated on Saturday that, “Despite the unnecessary impacts of this prolonged labor dispute, I urge swift adoption so that agricultural producers and businesses can regain the full use of ports on the West Coast to ship goods overseas and receive necessary shipments of merchandise. There’s no question the slowdown has cost billions of dollars through unnecessary harm to American businesses and consumers.”

And American Soybean Association President Wade Cowan noted on Saturday that, “Disruptions like the one we saw out west have the potential to throw the country’s farm economy into disarray. A devastating impact like that isn’t a bargaining chip. It goes without saying that we are relieved to see a resolution to the dispute, and we encourage both parties to ratify this new contract and get back to work as quickly as possible.”

Previous developments from Friday below.

In the ongoing labor dispute that is disrupting the operation of several West Coast Ports, Laura Stevens and Melanie Trottman reported on Friday at The Wall Street Journal Online that, “Negotiations between West Coast port employers and workers came to a head on Friday as the U.S. Secretary of Labor threatened to force the parties to resume talks in Washington, D.C., if they didn’t reach a new contract agreement by day’s end.

“Secretary Thomas Perez told West Coast mayors on a conference call Thursday night said that if the two groups couldn’t come to a resolution within 24 hours, they would be invited to the nation’s capital.”

The Journal writers noted that, “The U.S. president doesn’t have legal authority to summon the parties to Washington and such meetings rarely occur, ‘but it would be extremely difficult for either party to refuse to go,’ said Seth Harris, a former acting labor secretary and former deputy labor secretary in the Obama administration who is now a lawyer in Washington for law firm Dentons. ‘To not go would be an acceptance of blame that neither party would want,’ Mr. Harris said.”

“As of Friday morning, 27 ships were at anchor outside the ports of Los Angeles and Long Beach, three fewer than Thursday. On a typical February day last year, no ships were in line,” the Journal article said.

Bloomberg Photo–Ships wait to unload cargo at the Port of Los Angeles in Los Angeles, California, on Feb. 18, 2015. Photographer: Patrick T. Fallon/Bloomberg

James Nash and Alison Vekshin indicated on Friday that, “The impasse in talks toward a five-year contract between the International Longshore and Warehouse Union and the Pacific Maritime Association threatens to close seaports responsible for more than 40 percent of U.S. trade. Perez arrived in San Francisco on Feb. 17, dispatched by President Barack Obama after a federal mediator failed to bridge the gap between the two sides.”

A news release Friday from House Ag Committee member Rep. Dan Newhouse (R., Wash.) stated that, “Last week U.S. Congressman [Newhouse], Congressman Reichert (R-WA), Congressmen Schrader (D-OR), and Congressman Costa (D-CA) introduced a bipartisan resolution in the House urging an end to the contract negotiation between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU). Now, just a week later, the resolution has been signed by 61 members of Congress.”

Rep. Newhouse discusses impact of ports dispute for local growers.

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