Some good news came out of the ports last week.
During an on-stage meeting in Long Beach, the president of the International Longshore and Warehouse Union – representing labor – and the president of the Pacific Maritime Association – representing shipping lines and terminal operators and, therefore, management – surprised the crowd when both expressed interest in extending the current labor contract.
It would be a big deal if that actually happens. It’d be like Harry Reid and Mitch McConnell having a drink, playing some poker and jointly declaring that henceforth the Senate’s going to run as congenially as an elementary school student council.
A boatload of ill will has festered between labor and management at the docks for years. So the fact that both sides seem open to the notion of extending the contract an additional four years seems improbable. But according to published reports, it actually happened. The union president said he would take any extension offer to his membership if the ship operators made such a gesture. The president of the shipping association reportedly responded: “Look for the letter.”
The existing contract doesn’t expire for more than three years, but already shippers and industries are starting to squirm. That’s because the end of a contract means there’s a good chance of a protracted slowdown or strike at the ports, which can be killers for business, not a mere inconvenience. Exporters and importers may be thinking and planning now about how to cope with any future problems at the ports. So four additional years would be a relief now.
You might recall there was a long and devastating strike in 2002 and, among other problems, a slowdown that lasted about four months into early last year. The one last year was tough on retailers, which lost nearly $4 billion, and agriculture companies, which lost about $1.75 billion in exports each month as produce was left rotting on the docks.
But unfortunately, those customers of the ports seem doubtful of this expression of possible labor-management rapprochement. At that same meeting last week, called the Trans Pacific Maritime conference organized by the Journal of Commerce, more than 80 percent of attendees in a live poll said they expect just as much labor disruption in the coming years.
Why? It’s because they’ve heard this all before. They’ve been assured in the past that looming labor talks were going to be a breeze and even if there was a snag, any disruption would be minor and short-lived. But there were snags, always snags, and they kept turning out to be major and long-lived.
“We can’t forget what happened in the past,” Jonathan Gold, a lobbyist for the National Retail Federation, was quoted as saying in an article in Fortune.
Last year’s port slowdown “is having ramifications now,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition, in that same article. Foreign customers see U.S. producers as unreliable, he said.
“This has a continuing impact,” Friedmann said. “Not everything’s hunky-dory.”
There is a temptation among those of us outside the port complex to think of labor problems there as a series of isolated problems: Some issue holds up negotiations at contract time. An ugly slowdown or stoppage ensues at the ports. The issue eventually gets resolved. Activity resumes. Problem solved.
But the customers of the ports see it differently. They feel they have a necessary business partner in the ports, but that partner is unreliable and volatile. For them, when someone declares the end of another labor disruption, it’s kind of like someone saying, “Well, your business partner said he won’t walk out on you, at least not for a few years, so you can be friends again.” For them, the problem hasn’t been solved, just postponed. A year or two later, things are not hunky-dory.
Having said that, it still would be a relief if the contract were extended. That means we’d likely have seven years from now of labor peace and normal activity at the ports.
Whether that’s enough time to repair old relationships remains to be determined. But it would be good to find out.