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Feb.22, 2016

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TRADING PLACES 54 THE JOURNAL OF COMMERCE www.joc.com Peter Tirschwell FEBRUARY 22.2016 "How can we help?" THAT QUESTION FROM Alan Robb, head of the International Long- shoremen's Association for the South Atlantic and Gulf region, during a panel discussion at this month's Georgia Foreign Trade Conference. spoke volumes. And the shipper panelists — Rick Gabriel- son, vice president of transportation at Lowe's; Josh Dolan, vice presi- dent for international operations at Target; and Michael Symonanis, director for North America Logis- tics for Louis Dreyfus Commodities — liked what they heard. "Thank you for asking the ques- tion," said Bill Rooney, vice presi- dent for trans-Pacific sea freight at Kuehne & Nagel and the panel's moderator. The audience broke into applause. That attitude, he said, "is exactly what is needed. The common goal is the success of the enterprise. It's not the success of the union. It's not the success of management. What is needed is a combined effort to that end." A cooperative win-win attitude from longshoremen, which has long been present throughout the South Atlantic and U.S. Gulf regions, is a key reason shippers seeking predict- ability are gravitating to Georgia and other ports in the region. C o o p e r a t i o n a n d a c o m - mitment to keep cargo moving aren'tmessages they're hearing from dockworkers to the north, where 4,000 walked out on Jan. 29 in a mysterious wildcat strike at New York-New Jersey. And they're not hearing it from dockworkers on the West Coast, where in the absence of any coop- erative statements or gestures from the union, shippers are left with little choice but to plan for another round of catastrophic disruption when the next negotiations begin in advance of the current contract's expiration in 2019. That's why shippers, if their supply chains allow it, are saying, "Enough is enough." When final numbers are in, Georgia Ports Authority leaders believe it will be clear that Georgia retained a large percentage of cargo diverted to the East Coast last year as a result of the West Coast labor troubles. Their calendars are busy with meetings from shippers con - sidering Savannah as a gateway into the U.S. Southeast or beyond, looking to reconfigure supply chains based on new distribution centers in the region. Though keeping cargo moving has been a long-standing, proud tradition among dockworkers in the South Atlantic and U.S. Gulf, many shippers only discovered how important that is when they faced longshore disruption and related risk mitigation. The West Coast disruption was an "eye-opening experience for all of the stakeholders, including labor," said Dave Aresnault, president and CEO of Hyundai Merchant Marine America. "Supply chains will find the path of least resistance. It's just the way supply chains work. There are no secrets about the Panama Canal expansion and some of the impacts that could have, and just as carriers are competing among themselves for support from ben - eficial cargo owners, we have ports competing for cargo as gateways." With nothing happening — out- side the South Atlantic and Gulf — to reassure shippers that longshore labor disruption is a thing of the past in the U.S., it's no wonder they are seeking the safe haven of ports such as Savannah, where wildcat strikes like the recent one at New York-New Jersey seem almost inconceivable. The Jan. 29 strike was no minor event. Denunciations of the strike by the ILA's own president, Harold Daggett (who said he was "furi- ous that these guys walked out"), suggested to the market that the union lacks leadership and that another walkout could happen at any time. It also cast a further pall over negotiations that began last year to extend the existing ILA contract beyond its current expiration date in 2018, negotiations that ironically were triggered by a desire among those on the East Coast to lock in cargo diverted from the West Coast during the ILWU talks. The ILA talks already were com- plicated by discussions over chassis maintenance and repair. The union wants to ensure it maintains juris- diction, even though most chassis are now owned by lessors that aren't signatories to the longshore collec- tive bargaining agreement, an issue that remains unresolved. The walkout, which ILA offi- cials suggested was tied to anger at the Waterfront Commission and its oversight of the hiring of dockworkers, "is contrary to the spirit and letter of the collective bargaining agreement," Bill Payne, vice chairman of NYK Line (North America), told the Georgia confer- ence. "Whether it's an extension or whether it's the current contract, no strike, no lockout should be no strike, no lockout. Does it make sense going forward on an exten - sion? We'll have to see, but that's a contaminant, no question." It was refreshing to hear a prominent member of the ILA say he supports the needs of ship- pers. Until unions elsewhere in the U.S. embrace this at tit ude — what ILW U President Bob McEllrath says at the upcoming TPM Conference will be telling — shippers very well could choose to go elsewhere. They 're a lready doing it. JOC Contact Peter Tirschwell at peter.tirschwell@ihs.com and follow him on Twitter: @peter tirschwell. MUSIC TO SHIPPERS' EARS

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