Wednesday, January 8, 2014

Swirling Currents


New year could bring stormy contract negotiations to West Coast ports.

As the northern tier of the country dug out from a snowy, blowy deepfreeze, supply chains across the region were impacted, with roads closed, employees unable to get to work, and significant delays in shipments. Even local deliveries were impacted, as the Cincinnati Bengals and the Green Bay Packers were both unable to deliver a playoff victory to the hometown fans.

So maybe what we need is an ocean voyage to get away from it all. But there is a storm brewing on the rolling deep as well, as employers and the International Longshore and Warehouse Union prepare for what could be the most contentious contract negotiations in decades.

Jim McKenna, president of the Pacific Maritime Association, which represents the longshoremen’s employers, sees the key issues in negotiations this spring as being pension language, jurisdiction and health care, reported the Journal of Commerce. Wages haven’t been a stumbling block in recent contracts. Longshoremen are among the highest-paid blue-collar workers in America, with average annual earnings for ILWU general longshoremen of $132,046, while marine clerks averaged $149,800.

Key issues that will arise in negotiations leading up to the July 1 expiration of the current contract have their genesis outside of the Pacific Coast Longshore and Clerks’ Agreement. Carriers’ relentless move to form or expand their alliances in order to cut costs in a capital-intensive industry reached a new level last year when the world’s three largest carriers by fleet capacity — Maersk Line, CMA CGM and Mediterranean Shipping Co. — announced plans to form the P3 Network. When carriers form alliances, they reshuffle port and terminal calls, potentially pitting one port or terminal against another to improve productivity.

Another key for the union is the ubiquitous and growing presence of optical character readers, global positioning satellites, computerized yard-management systems and other electronic processes, raising issues of jurisdiction and job retention, over which both sides have demonstrated their willingness to shut down port operations in the past.

So welcome to 2014, where the one thing that we know for sure about the road ahead is that, whether on land, sea, or air, there will be bumps – and many currents swirling.

Kirk Shearer
President
TOTALogistix
www.totalogistix.com
1-800-989-0054 x103

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