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: Are US ports any less critical to US commerce than rail and airlines? That is the question many are now asking.  What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

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)