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Focus: Global Supply Chain and Logistics

Our Weekly Feature Article on Topics Related to Global Supply Chain & Logistics
 

From SCDigest's On-Target e-Magazine

- Dec. 9, 2014 -

 

Global Supply Chain News: Is It Time to Change Rules for How Port Labor Negotiations are Handled?


As West Coast Ports Talks Drag On and Threat of Strike Grows, Some Call for Putting Port Labor Under Railways Labor Act

 

SCDigest Editorial Staff

 

We are now entering the fifth month in which the International Longshore and Warehouse Union (ILWU) is working without a contract with the association representing West Coast ports and terminals.

The contract expired June 30th, and while initially discussions seemed fairly cordial and a thorny issue related to healthcare coverage was said by both sides to have been settled on a conditional basis, as the talks drag on the mood has become a lot more tense.

SCDigest Says:

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Are US ports any less critical to US commerce than rail and airlines? That is the question many are now asking. 

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For the past several weeks, the Pacific Maritime Association has accused the ILWU of intentional work slowdowns, primarily achieved by not sending an adequate number of Longshoremen to take containers off ships or move them around terminals. This has contributed to epic congestion and delays at many West Coast ports, notably at the giant complex at Los Angeles and Long Beach, by far the largest port in the US in terms of volumes.

The ILWU, in fact, also took a 12-day break from talks in late November, finally returning to the negotiating table on Dec. 2. Container industry observers, including major industry organizations such as the National Retail Federation, are increasingly complaining about the port delays and the threat of a strike by the ILWU if a deal is not reached soon. It is also possible that the PMA could call for a lockout of union members, an action it took in 2002 that led to a 10-day shutdown of West Coast port activity, costing the economy many billions of dollars.

Now, some commentators are saying that legislators should act to make the chances of such a stoppage at East, West or Gulf Coast ports less likely by bringing port operations under the Railway Labor Act.

A cornerstone of the RLA, first passed in 1926, is its goal to "avoid any interruption of commerce" while providing for "the prompt and orderly settlement of all disputes" that arise in labor matters. Labor contracts under the RLA do not expire. Instead, they become "amendable" and remain in force until a new agreement is reached.

When first passed, it was designed to reduce the chances of a strike crippling rail transportation. The act was amended in 1934 to also include airline operations.

The RLA provides a framework for mediation in the event of disputes between labor and management of the airline and railroad industries. The act created the National Mediation Board (NMB), an independent agency to oversee the reconciliation process, minimizing the disruption of transit points.

The purpose of the RLA and the NMB, as stated in the statute, is to "avoid any interruption of commerce," while providing for "the prompt and orderly settlement of all disputes" that arise in labor matters.

Are US ports any less critical to US commerce than rail and airlines? That is the question many are now asking.

Writing in the Wall Street Journal this week, Douglas Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office, says that "Ports are an essential part of modern commerce, yet there is no end in sight to the disruptions. As soon as the 2014 negotiations are (finally) concluded, businesses will have a reprieve only until the next costly negotiation."

He adds that "Modern commerce doesn't face a similar threat when airline pilots fail to reach a contract agreement. Nor is it disrupted when rail personnel find themselves unable to come to terms with railroads. Instead, those negotiations are conducted according to the Railway Labor Act."


(Global Supply Chain Article Continued Below)

 
CATEGORY SPONSOR: SOFTEON

 
 

Separately, Diana Furchtgott-Roth, former chief economist of the US Department of Labor who now directs Economics21 at the Manhattan Institute, writes that "Ports are critical to US infrastructure and trade, and should be governed in the same manner as the railroad and airline industries."

She adds that "President Obama and Congress should not allow millions of jobs and hundreds of billions in income be held hostage every time a contract expires. Protections written into the RLA adequately safeguard our nation's airline and railway networks, and it would be a logical step to extend the Railroad Labor Act to our critical West Coast port network."

Under the RLA, if negotiations are not progressing, then federal mediation is required before either unions or employers can engage in tactics such as slowdowns, strikes or lockouts. The National Mediation Board, which oversees the process, says that 99% of all of its mediation cases since 1980 have been handled without interruption.

To bring ports under the RLA will require new legislation by Congress that would be signed by the president – neither of which is a likely proposition, and the effort would generate vigorous opposition from labor.

The orderly settlement of these current West Coast talks will probably put the idea of moving the ports under the RLA on the back burner, but if a strike or lockout is experienced, with all the supply chain and commerce havoc that would create, then it is just possible the new Republican controlled Senate could take some action. A White House signature, however, is another matter.

"Under the RLA, commerce and transportation remain uninterrupted during the dispute and mediation process, unlike what is occurring on the West Coast now," adds Furchtgott-Roth. "This presents a win-win situation for all parties concerned and, most importantly, the American consumer."

 

Do you think US ports should come under the Railway Labor Act? Why or why not? Let us know your thoughts at the Feedback button (email) or section (web form) below.


 

Recent Feedback

Absolutely they should fall under the RLA.  I have asked this same question for a long time.  The economy is in a slow recovery, but the current situation on the west coast is threatining to de-rail what recovery has been experienced.   Additionally, we have already seen one major Steam ship line pull out of LA and if it continues, others will follow suit.  With Vancouver and Mexico expanding their intermodal facilities, the ILWU needs to look at Detroit and see what constant union pressure for more and more has created. The west coast ports will be ghost towns like Detroit with other more welcoming ports that have a much better efficiency rating than they do. The world's highest paid longshoreman are among the world's least efficient.  Business will not tolerate that for long and will move to other ports.  We have moved 80% of our imports that were coming through LA/LB to Savannah since August. 


Roger
Production Controller
Ionic Solutions
Dec, 09 2014
 
 
   
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