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Jan.26, 2015

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4 THE JOURNAL OF COMMERCE Editor's Letter Chris Brooks WHEN THE INTERNATIONAL Long- shore and Warehouse Union on Jan. 5 joined waterfront employers in requesting federal mediation in labor talks that had stalled after more than eight months, hopes spiked through- out the container shipping industry. It was the first step, industry interests said, toward resolving increasingly tense negotiations that coincided with increasingly debili- tating congestion at West Coast ports. The feelings were justified, grounded on the well-founded suc- cess of past mediation efforts. The honeymoon in the wake of the Federal Mediation and Concili- ation Service assuming control of the talks — if you can call anything in acrimonious labor-management relationships a "honeymoon" — lasted less than a week. If anything, the negotiations, as Senior Editor Bill Mongelluzzo discusses in this week's Cover Story, have reached a nadir since media- tors joined the fray, with both sides engaging in a war of words that has busted wide open a mutual pledge the two sides made when this pro- cess began last May not to discuss details of the negotiations. "Unfortunately, it appears the union's motivation is to continue slowdowns in an attempt to gain leverage in the bargaining," PMA spokesman Steve Getzug said last week, a charge ILWU President Bob McEllrath was quick to counter: "(Employers are) making nonsensi- cal moves like cutting back on shifts at a critical time, creating gridlock in a cynical attempt to turn public opin- ion against workers," he said. M a ny sh ipp er s a nd c a r r i- ers, burned by weeks-long delays at Los Angeles-Long Beach, have had enough. East Coast ports are relatively congestion-free — New York-New Jersey and Virginia hav - ing worked through their own issues during last summer's peak season and Charleston and Savannah operating as efficiently as ever. And imports spiked 72 percent in December at Prince Rupert, and the British Colum- bia port says it's ready to handle more. Indeed, supply chain interests have options, and they'll only increase over the next year and beyond. The Panama Canal is a year away from being able to handle 13,000-TEU ships. New York-New Jersey is about the same from completing a project to raise the Bayonne Bridge, eliminat- ing air-draft restrictions that prohibit mega-ships from calling at four ter- minals at the nation's third-largest port. Charleston is awaiting autho- rization to dredge its channels to 52 feet, which would allow 14,000-TEU vessels to call as early as 2019. Perhaps most ominous in a Jan. 12 PMA statement that kicked off the latest charges and countercharges is this: "The ILWU slowdowns and the resulting operational environment are no longer sustainable. The PMA has alerted the local port authorities to the deteriorating situation on the docks." Although the PMA followed up by saying the statement should be taken at face value — that is, the terminals are approaching gridlock — a grow- ing contingent of employers believe the best route to reaching a contract is by locking out the ILWU. For now, that's the minority view. The majority still believes a war of attrition will win out. But the ILWU appears to believe the same. The out- come, then, likely rests with who will blink first on issues that, according to the PMA, don't involve wage and benefits, but include jurisdiction over chassis maintenance and repair — an issue that, given carriers' exit from that business, the PMA has limited control. Among the main participants, one thing is more obvious by the day: There will be no winners — not the West Coast ports, terminals, trucking operators or the ILWU. Whatever the outcome, it will be a Pyrrhic victory. The true victors could be those ports, terminals and other interests that have no stake in the game. JOC Divided We Stand The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, January 26, 2015, Volume 16, Issue No. 2. 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, 2 Penn Plaza East, Floor 12, Newark, N.J. 07105-2257. JANUARY 26.2015 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 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 ©2015 The Journal of Commerce — All Rights Reserved For more information, visit our website,

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