West Coast Strike May End..Backlog Remains.
Date: February 21, 2015 Update;
(Provided by Soy Transportation Coalition)
Last night, negotiators representing 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) reached a tentative agreement to end the labor dispute that has resulted in a major disruption of service along the West Coast.
According to reports, the two sides have agreed to a five year contract. Specific terms on the contract have yet to be disclosed. The agreement must now be ratified by the membership of both parties.
In announcing the decision, U.S. Secretary of Labor Thomas Perez said that ports along the West Coast will resume working "full bore" today (Saturday) in order to clear the backlog in container traffic.
We applaud the two sides for bringing a resolution to this lengthy dispute that has had a punitive impact on U.S. agriculture and the overall economy. We encourage the membership of the ILWU and the PMA to quickly ratify the agreement.
We are hopeful that the severe backlog of cargo along the West Coast can be quickly relieved. More importantly, we are hopeful that our 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. 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.
The long term question remains whether it is in the best interest of U.S. agriculture and the overall economy for 13,600 highly compensated dockworkers on the West Coast to have such a pivotal role in our country's ability to export to the global marketplace. The U.S. is fortunate to have a highly efficient, dynamic agricultural sector and international customers with a growing desire and appetite for these products. However, if we truly want to be the world's preeminent exporter 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.
Below is some additional background information that was disseminated earlier this week that may be of interest:
The disruption on the West Coast has not impacted the bulk shipments of agricultural products. 25 percent of soybean exports, 35 percent of wheat exports, and 13 percent of corn exports depart from the Pacific Northwest. The overwhelming majority of those exports are loaded at grain export terminals onto bulk ocean vessels that have a separate agreement with the ILWU. Some of those individual export terminals have their own agreement and contract with the ILWU. Others will band together and have a collective contract with the union. All of them, however, are except from the current friction on the West Coast. As a result, bulk shipments of soybeans and grain have been unaffected. Last year, negotiations between the ILWU and a few grain export terminals in the Pacific Northwest became quite tense. Fortunately a contract for those few terminals was agreed upon in August of 2014.
The disruption of service on the West Coast has been occurring at the terminals that import and export products shipped via container, not bulk. While the vast majority of soybean and grain exports occur via bulk, the tension on the West Coast has imposed hardship on these industries. According to the U.S. Department of Agriculture, approximately 10 percent of soybean and grain exports occur via container. Of this 10 percent, the two main commodities exported via container are distillers dried grains (DDGs) at 50 percent and soybeans at 25 percent. 97 percent of soybean and grain exports via container are destined for Asia – the West Coast being the primary launching point.
While the disruption on the West Coast has imposed harm on the export of soybeans and grain, it has had a tragic impact on the exports of meat, fresh fruit, and a host of other agricultural products. Many of these products, like meat, are domestic customers of soybeans and grain which are in turn exported. The American Meat Institute and the National Pork Producers Council claim that the West Coast delays have costed each industry $40 million per week.
In total, I have seen estimates that the disruption on the West Coast has cost U.S. exporters of agricultural products $1.75 billion each month.
The ILWU has approximately 13,600 longshore, clerk, and foreman workers that have been in negotiations with the Pacific Maritime Association. The average salary for an ILWU member is $147,000. On top of that, each member receives $82,000 in annual benefits. So the billions of dollars of harm to the U.S. economy, including agriculture, has largely been precipitated by 13,600 individuals with an average total compensation of $229,000 claiming that they need to be treated more generously.
KEN ROOT, Agricultural Journalist