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July13, 2015

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4 THE JOURNAL OF COMMERCE Editor's Letter Chris Brooks P O P Q U I Z , S H I P P E R S : The fol- low ing quote appea red when? "We ask that you continue the nego- tiations without delay, and without impacting commerce moving through the ports. We would further ask that you issue a statement committing to continue negotiating and working without interruption ..." If you said it came sometime dur- ing the nine months of negotiations between the International Longshore and Warehouse Union and Pacific Maritime Association, well, you might be right. Similar statements, after all, were fixtures during the congestion that mired beneficial cargo owners in a supply chain nightmare that took months to resolve after the two sides reached agreement in February. But, no, that statement from National Retail Federation President and CEO Matthew Shay actually came in a letter to the International Long- shoremen's Association and United States Maritime Alliance in July 2012 during their own contract battle. Three years later, and halfway into their current six-year pact, the ILA and USMX already are talking about its successor, a long-term agreement or extension that could run through 2025. "It could be a seven-year exten- sion. It could be a brand-new contract. Everybody's saying 10 years, but we haven't really decided yet," ILA President Harold Daggett told Senior Editor Joseph Bonney in the run-up to the union's upcoming quadrennial convention in San Juan, Puerto Rico. "If the deal is really good, who knows what we'll come out with? We're open to anything, as long as my member- ship is protected." BCOs no doubt would welcome the stability inherent in a 10-year pact — which would be the longest the ILA has ever negotiated — especially in an age when instability has reigned. But it also comes with significant risks, considering how much the market can change in that time. Consider that the iPhone, the first real commercial smartphone, just turned 8-years-old. Consider that we're just five years removed from the worst economic downturn since the Great Depression. Ports in the U.S. Gulf have been leveled (Hurricane Katrina in August 2005) and rebuilt. Ten years ago, George W. Bush was president. The ILA itself has had three presidents in that time: John Bowers, Richard Hughes and now Daggett. In 2005, the United States' first fully automated terminal — APM Ter- minals' Portsmouth, Virginia, facility — was still two years away from open- ing, and container operations at Prince Rupert, British Columbia, didn't exist. OK, that's on the Pacific, but you get the point: In such a rapidly changing world, how can anyone predict the market environment a decade out? Cycles and innovation churn within a year, sometimes less. Automation is revolutionizing business seemingly daily. The ILA, in opening the door to the extra-long term, certainly is look- ing to capitalize on the congestion and raw memories of the recent past that have put West Coast ports in shipper crosshairs. The ILA, indeed, is preying on that shipper sentiment, and the soon-to-open expanded Pan- ama Canal that could shift more cargo from West Coast to East Coast. And who can blame it? That's business. But I'll take you back to the open- ing quote as a reminder that it wasn't long ago that the ILA was fighting the same backlash its West Coast broth- ers are now. It will be interesting to see how the ILWU responds, if it chooses to, or whether it remains on the defen- sive, bleeding market share to East and Gulf ports. Somehow, I don't see the ILWU sitting on its laurels. The fight for cargo is only just beginning. JOC ILA Power Play The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, July 13, 2015, Volume 16, Issue No. 14. 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. JULY 13.2015 EXECUTIVE EDITOR, THE JOURNAL OF COMMERCE AND JOC EVENTS Chris Brooks 973.776.7818 MANAGING EDITOR Barbara Wyker 973.776.7817 EXECUTIVE EDITOR, JOC.COM Mark Szakonyi 202.872.1234 SENIOR EDITORS Joseph Bonney, Finance and Economics 973.776.7809 William B. Cassidy, Trucking and Domestic Transportation 202.872.1228 Bill Mongelluzzo, Trans-Pacific 562.428.5999 Greg Knowler, Asia +852 3975 2647 ASSOCIATE EDITOR Reynolds Hutchins 202.572.1487 EDITOR-AT-LARGE Peter T. Leach, Trans-Atlantic 212.755.0940 RESEARCH EDITOR Marsha Salisbury 973.776.7828 ECONOMIST Mario O. 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