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Nov.10, 2014

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TRADING PLACES 78 THE JOURNAL OF COMMERCE www.joc.com Peter Tirschwell NOVEMBER 10.2014 ENOUGH IS ENOUGH SHIPPERS AND ALL they represent — things such as jobs, sales, cus- tomers, exports — again have been relegated to the cheap seats while the melodrama of U.S. West Coast longshore negotiations plays itself out in all-too-familiar fashion. After months of civil, low-deci- bel dialogue that spared peak-season disruptions but was hardly without cost to business, talks to replace the contract that expired on July 1 went off the rails last week. Slow- downs, accusations and dueling press relea ses, a ll rema rkably absent in the seven months since talks started in May, were back on the table, and industry stakeholders again were left shaking their heads in disbelief. And no wonder. Where else in U.S. business does an old-fashioned labor-management showdown rip- ple throughout virtually the entire consumer economy? There wasn't a single U.S. retailer or consumer product maker that didn't divert merchandise to non-affected ports, accelerate ordering at the factory in China or wherever, or seriously consider doing so to avoid possible disruption at West Coast ports this year. No U.S. labor negotiation comes close to the overarching impact this one has on U.S. com- panies and the economy, not the potential of it, the reality. That's why the National Retail Federation and other shipper groups have been begging the International Longshore and Warehouse Union and the Pacific Maritime Asso- ciation representing employers to settle this thing and allow normal supply chains — in other words, normal business — to resume in this year of economic recovery. They've gone to the seaports, the U.S. Fed- eral Maritime Commission and their congressional representatives seeking any opening whatsoever to pressure the two sides to forge an agreement and put the uncertainty to rest. Despite the two sides mutually pledging all summer to keep cargo moving, the scenario last week dissolved into disruption on the docks and the all-too-familiar tit- for-tat mutual recrimination that has characterized U.S. West Coast negotiations many times in the past. Fact is, these negotiations are a world unto themselves, insular, tone-deaf and impervious to outside pressure. The only flimsy assurance retailers, exporters and manufac- turers had that disruption won't occur is the peace the two sides pledged in press releases to uphold. A no-strike clause was in the prior contract, but that expired in July. Last week's disruption last showed how little the assurances that had been duly repeated in joint PMA-ILWU press releases all sum- mer were actually worth: nothing. Despite those pledges to keep cargo moving, "the ILW U has reneged on that agreement," a PMA spokesman said last week in accus- ing the dockworkers of engaging i n slowdow n s at Seat t le a nd Tacoma. The union called the allegation "a bold-face lie," establish- ing a new rhetorical low for these negotiations. When a new contract is eventu- ally signed, and it will be, businesses throughout the U.S. and beyond will again have been dragged through the same exhausting, costly and disruptive process as they were in 2008, 2002, 1999 and prior years. There was no 134-day strike as there was in the early 1970s, but by today's standards any disruption is costly whether it takes the form of an actual strike or not. And to what end? No guaran- tees or assurances that this won't happen again will come out of the talks. Some technical points will probably emerge about health care, who services broken chassis or what handling equipment the terminals can use to move containers, and maybe some expectation that the docks will remain calm during the duration of the contract, which still has to be determined. But the ILWU and PMA won't deliver what's needed most: a guar- antee that disruption won't occur in the future. A no-strike clause likely will be included, but what does that amount to when the likeliest time for a strike is after the contract expires? Dockworker strikes are largely a thing of the past anyway; more likely is insidious disruption masked as something else that is hard to prove. Ports provide employment and other local economic benefits. But they were created and continue to exist because companies use them to ship their goods. Ports know they can't take that business for granted. And those for whom the ports were created and are run for — those who must ship goods to carry out their business — will have gained nothing and will be left unsatisfied once this is all said and done. A resolution to the issues hashed out over the past seven months isn't a resolution to the larger issue, which is the unacceptable level of uncertainty that surrounds using U.S. ports because of periodic long- shore labor negotiations that occur on all three coasts. On that front, something must change. JOC Contact Peter Tirschwell at ptirschwell@joc.com and follow him on Twitter: @petertirschwell. No guarantees or assurances that this won't happen again will come out of the talks.

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