Shocking East Coast Port Walkout Shrouded in Mystery, Logistical Headaches

Expectations and concerns regarding potential labor peace disruptions at U.S. ports have been heavily focused on West Coast-based operations. To the surprise of shippers and even union leadership, the first port flashpoint of 2016 occurred last week on the opposite coast at the Port of New York and New Jersey and with almost no warning or subsequent explanation.

On Jan. 29, workers at the third-busiest domestic port walked off the job, causing thousands of backups well into the following week. The walkout lasted less than a full day, as both an arbitrator and union leadership failed to support the action. International Longshoremen's Association (ILA) leadership instructed the workers to "to accept orders and return to work immediately" and noted it had "heard your voices" in a message posted on its website. The cryptic message offered no explanation for the reasoning behind the walkout, though worker unrest at many U.S. ports has been escalating because of concerns over perceived working conditions issues, outdated technology, crumbling infrastructure and ship/load sizes. ILA leaders appeared angry at their own membership in public comments about the incident and said they were not made aware of any plans for a walkout last week.

This is the first significant port incident since last year, which saw a number of disputes between union workers and port ownership. In early 2015, operator Pacific Maritime shut down many ports along the U.S. West Coast, including the Port of Los Angeles and the adjacent Port of Long Beach, alleging workers from the International Longshore and Warehouse Union (ILWU) intentionally reduced production in protest over unresolved contracts and poor working conditions. The shutdown lasted only a few days. In 2012, a 10-day work stoppage cost West Coast ports upward of $1 billion per day. Work stoppages in present day could cost at least double that because businesses have sought more buyers, in B2B and retail, outside of the U.S. due to weakened demand during the recession and increased trade support programs promoted by the Obama Administration.

In addition, the two largest freight ship dockings in U.S. history occurred in Los Angeles. Although an achievement in that the so-called "mega-ship" was more than 20% larger than any previous domestic port docking, questions about workloads and equipment are expected to follow. Los Angeles and Long Beach operations serve an estimated one-third of all U.S. imports.

- Brian Shappell, CBA, CICP, NACM managing editor

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