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Nov.24, 2014

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4 THE JOURNAL OF COMMERCE Editor's Letter ©2014 The Journal of Commerce — All Rights Reserved For more information, visit our Web site, EXECUTIVE EDITOR, THE JOURNAL OF COMMERCE AND JOC EVENTS Chris Brooks 973.776.7818 MANAGING EDITOR Barbara Wyker 973.776.7817 ASSOCIATE MANAGING EDITOR, JOC.COM Mark Szakonyi, 202.499.2295 SENIOR EDITORS Joseph Bonney, Finance and Economics 973.776.7809 William B. Cassidy, Trucking and Domestic Transportation 202.499.2285 Bill Mongelluzzo, Trans-Pacific 562.428.5999 Greg Knowler, Asia +852 3975 2647 EDITOR-AT-LARGE Peter T. Leach, Trans-Atlantic 212.755.0940 RESEARCH EDITOR Marsha Salisbury 973.776.7828 ECONOMIST Mario O. Moreno 973.776.7850 SPECIAL PROJECTS EDITOR Alessandra Gregory Barrett 860.248.5238 SPECIAL PROJECTS EDITOR, ASIA Annie Zhu +86 (21) 60396986 SENIOR DESIGNER Sue Abt, 973.776.7825 DESIGNER Bryan Boyd, 973.776.7827 ASSOCIATE WEB EDITOR Grace M. Lavigne 973.776.8506 ASSOCIATE WEB EDITOR Corianne Egan, 862.368.4054 PUBLISHER Tony Stein 770.295.8809, SALES Cindy Cronin, Strategic Account Manager Southeast, Gulf, Canada sales, 954.551.8305 Zachary Gorman, Account Executive Northeast sales, Classifieds/Reprints/Copyrights 973.776.7820 Jennifer Mallinger, Account Executive Midwest, West Coast sales, 630.210.6827 Ria Van den Bogaert, Sales Representative Europe, Middle East sales, +32 2 569 8905 Bon Kwok, Sales Representative Asia sales, +852 31707373 Michihiro Kawahara, Sales Representative Japan sales, +81 3 3212 3671 For Magazine Subscription Customer Service: 2 Penn Plaza East, 12th Floor, Newark, N.J. 07105 973.776.8660 • 800.952.3839 CHIEF EXECUTIVE OFFICER, Gavin Carter CHIEF OPERATING OFFICER, Rhiannon James EXECUTIVE VICE PRESIDENT/CHIEF CONTENT OFFICER, Peter Tirschwell CHIEF FINANCIAL OFFICER, Ian Blackman VP, PUBLICATIONS, Amy Middlebrook VP, HUMAN RESOURCES, Cindy Mevorah GENERAL MANAGER, Julia Murphy DIRECTOR, PRODUCTION, Carmen Verenna SENIOR MARKETING MANAGER, Jesse Case Bill Mongelluzzo THE LABOR AND congestion situation at West Coast ports is in a rut. Cargo is moving through major gateways at a much slower pace than usual, and longshoremen are engaging in work slowdowns, but not to the degree where they invite federal govern- ment intervention. Negotiators for the International Longshore and Warehouse Union and the Pacific Maritime Association are meeting daily, including on week- ends, with contract negotiations now in their seventh month. Except for a late-summer joint announcement that a tentative agreement had been reached on the important issue of health care benefits, there have been no further reports of progress in reaching a new contract. The ILWU has been working without a contract since July 1. The union refuses to extend the previ- ous contract, which means there is no grievance procedure in place to quickly arbitrate health and safety claims and work slowdowns. The ILWU, however, is showing no desire to strike. The ILW U charges that decisions made years ago by carriers to deploy ever-larger ships and to divest themselves of chassis are the main causes of port congestion. Similarly, the PM A says the union's slowdown tactics are con- tinuing, but the employers a re showing no signs that they're ready to lock out the ILWU as they did dur- ing a 2002 contract impasse. Container volumes are relatively strong. Los Angeles and Long Beach in October reported a combined increase of 3 percent in container volume compared to the same month last year, led by a 6 percent gain in imports. The elevated cargo volumes are contributing to the ports' conges- tion woes, according to Val Noronha, president of Digital Geographic Research, whose research is detailed in this week's cover package. The Teamsters union, mean- while, has used the ports' labor and congestion problems to elevate its drive to organize the thousands of drayage truck drivers in the harbor. Drivers have set up pickets at a half- dozen container terminals where they are targeting trucks belonging to drayage companies they charge are engaging in wage theft and driver misclassification. The PMA last week reported container moves per crane per hour in Seattle-Tacoma and Oakland were about 30 percent lower than normal. The ILWU in Los Angeles-Long Beach is filling only about 50 per- cent of the labor orders for skilled longshoremen needed to operate cargo-handling equipment, the PMA charged. The ILWU denies that its mem- bers are engaging in work slowdowns. Carriers themselves must be blamed for many of the factors causing the congestion, ILWU spokesman Craig Merrilees said. "The congestion crisis that is paralyzing West Coast ports today was born months and years ago when employers made fatally flawed decisions to change their chassis pools, overwhelm ports with massive new vessels and ignore conditions that have spawned a short- age of drayage drivers — all problems they caused and continue to ignore," he said. The only solution to these issues, Merrilees said, is to work with the ILWU to reach a fair contract set- tlement as soon as possible. But all indications point to that being weeks away, at least, rather than days. JOC Going Nowhere Fast The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, November 24, 2014, Volume 15, Issue No. 24. The Journal of Commerce is published bi-weekly except the last week in December (printed 26 times per year) by JOC Group Inc. 2 Penn Plaza East, 12th Floor, Newark, N.J. 07105. Subscription price: $344 a year. Periodicals postage paid at Newark, N.J., and additional mailing offices. © All rights reserved. No portion of this publication may be copied or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, P.O. Box 1059, Skokie, IL 60076-8059. NOVEMBER 24.2014 "The congestion crisis that is paralyzing West Coast ports today was born months and years ago."

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