Digital Edition

March 18 2019

Issue link: https://jocdigital.uberflip.com/i/1090003

Contents of this Issue

Navigation

Page 61 of 63

62 The Journal of Commerce | March 18 2019 www.joc.com Trading Places Peter Tirschwell A deal is a deal THE NEGATIVE REACTION of dock- workers at Los Angeles-Long Beach to APM Terminals' plan to introduce automation at its Pier 400 terminal at Los Angeles is a worrying sign for labor stability at the largest US port complex. For shippers who had thought all was quiet on the West Coast waterfront, that will come as a sur- prise. In 2017, when the West Coast dockworkers union, the International Longshore and Warehouse Union (ILWU), ratified an unprecedented contract extension through July 2022, it was heralded as the most positive signal of labor stability on the West Coast in a generation. After six months of disruption to supply chains in 2014 and 2015 and several bouts of prior disruption accompanying West Coast contract negotiations going back into the 1990s, the fact there would be no con- tract negotiation for five years meant the ports could be counted on to be free of labor strife, at least until 2022. That basic premise hasn't changed. But dockworker efforts in recent weeks to overturn Los Angeles port approval of an APM Terminals plan to introduce automated container- handling equipment in a section of Pier 400 devoted to reefer containers suggests labor relations may be enter- ing a new period of uncertainty. The issue has exposed tensions between labor and management on the West Coast and has opened a new chapter in the rivalry between the ILWU and East and Gulf Coast dockworkers represented by the International Longshoremen's Association (ILA). The right of terminal operators to automate operations at US West Coast ports was enshrined in contracts in 2002 and 2008. The 2002 contract, which followed a historic 10-day shut- down, allowed for the introduction of clerk technology, while the more significant 2008 agreement allowed traditional dockworkers to be replaced by machines. Employers paid dearly for this right, agreeing to more than a 40 percent pension increase, a guaran- teed 40-hour work week for life for all registered dockworkers, and increased jurisdiction for the ILWU over mainte- nance and repair work. Since the 2008 contract was signed, officials say, the cost of the pension increase to employers has been more than $800 million, while use of the contract by terminals has been limited. Since then, only two West Coast terminals have introduced auto- mation, TraPac at Los Angeles and Long Beach Container Terminal at Long Beach. The introduction of reefer-handling technology by APM Terminals was to be next. With the contract, signed with the coastwise employer group, the Pacific Maritime Association, offering no ambiguity, dockworkers turned to the more friendly Los Angeles Board of Harbor Commissioners whose members are appointed by the mayor. In late January, under pressure from the union, the port commission postponed consideration of the permit from its agenda and will take it up again on March 21. As one dockworker leader said at a protest, quoted by the Daily Breeze newspaper, "You're talking about medical plans, you're talking about pension plans, you're talking about community jobs." The union, as in the past, seems oblivious to the fact that labor disrup - tion has driven down West Coast import market share from 57 percent to 48 percent since 2005, according to PIERS, a sister product of The Jour- nal of Commerce within IHS Markit. The union says the construction permit issued to APM Terminals by port staff to build fences, antennas, and electrical conduits violates Cal- ifornia law overseeing the coastline. Nonsense, say employers, who see the move as an end-run around the ILWU-PMA contract that not only allows automation, but states dockworkers "will not interfere with implementation." If the automation allowed under the 2008 contract was so object- ionable to the union, employers ask, "Why did they not raise the issue during the disruption-ridden negotiations pursuant to the 2014 contract, or in talks associated with the extension signed in 2017?" For APM Terminals, and possibly other terminal operators to follow, the decision to automate stems from the 2017 Clean Air Action Plan, which requires terminals to operate zero- emission equipment by 2030, a man- date that will require replacement of existing container-handling equip- ment at a total cost of up to $14 billion. It has to be paid for somehow, and given that the Los Angeles-Long Beach port complex is a competitive market of 13 terminals, it's unlikely to come from rate increases on ocean carriers. The effort to stop APM Terminals can be seen in light of two recent developments — an upcoming local union election where leaders want to be seen as tough on employers, and the fact that the ILA has publicly drawn a contrast between its contract, which does not allow for automation, and the contracts signed by the ILWU. In an ILA press release tied to pro - tests over Pier 400, the ILA noted its own extension signed in 2018 did not allow for automation. "Any doubts about ILA President Harold J. Dag- gett's strong opposition to fully auto- mated terminals and the value of the ILA's new six-year master contract extension signed last summer, were erased when news of a major protest … by longshore workers belonging to Local 13, International Longshore and Warehouse Union in Los Angeles was reported. The central issue of the pro- test by West Coast longshoremen was the threat of automated terminals." Following Daggett's Feb. 7 pledge that ILA productivity would be "far better than any robot or equipment would" generate, New York-New Jersey longshoremen have adopted a new gang system to achieve at least 30 crane moves an hour. Employers say the program, which is in the early stages of implementation, is by far the most structured effort undertak- en in the port to improve longshore productivity. JOC email: peter.tirschwell@ihsmarkit.com twitter: @petertirschwell

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - March 18 2019