Port slowdown, deteriorating infrastructure hurting ag exports

WASHINGTON, Feb. 10, 2015 – A labor dispute at West Coast ports is being felt across the country, but a Senate subcommittee hearing Tuesday examined if the country’s current infrastructure is helping exports, even with a fully employed labor force.

For several months, the Pacific Maritime Association (PMA) has been at odds with the International Longshore and Warehouse Union (ILWU) over a new labor agreement. That’s resulted in a labor slowdown that has crippled exports from the West Coast. Last weekend, PMA shut down several West Coast ports rather than pay workers to work slowly.

“After three months of union slowdowns, it makes no sense to pay extra for less work,” PMA spokesman Wade Gates said in a statement, “especially if there is no end in sight to the union’s actions which needlessly brought West Coast ports to the brink of gridlock.”

The ILWU, meanwhile, called the employers’ actions “reckless and unnecessary.” In a release, ILWU International President Robert McEllrath said, “What the employers need to do is stay at the negotiating table and work through a few remaining issues with the workers who have made them successful for the past 80 years. We are very close to reaching an agreement.”

The two organizations are currently locked in a game of dueling press releases. On Monday, PMA released details of a “major union demand” in negotiations, claiming ILWU was demanding the ability to fire arbitrators and veto arbitrators’ rights to prevent union slowdowns. That same day, ILWU released aerial photographs of the ports of Los Angeles and Long Beach showing plenty of vacant concrete surface, rebutting PMA’s claims that the slowdown has caused ports to be too full to accept new cargo. PMA claims its latest “all-in” offer is far outside of its comfort zone.

“The PMA has concluded that the latest offer as far as we can go at this point. Now, the PMA must decide how much longer we are going to pay longshore workers to work slowly,” Jim McKenna, PMA president and CEO, said in an online video. “These slowdowns are having the same result as a workers strike, except that workers are still getting a paycheck. The slowdowns need to stop.”

Nearly every senator taking part in the hearing for the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security called on both sides to settle the dispute quickly. Subcommittee chair Deb Fischer, R-Neb., added that it is particularly important for members of Congress and administration officials to keep an eye on these proceedings because there is “potential for ports on both coasts to be negotiating simultaneously in 2018, which is when the current East Coast labor contract expires.”

Fear of permanently lost international market share and spoilage of perishable agricultural products is at play because of the current work stoppage. There was also concern expressed at the hearing about the state of America’s transportation infrastructure. Subcommittee ranking member Richard Blumenthal, D-Conn., said it was an “ongoing failure” for the U.S. to spend less than 2 percent of its GDP on infrastructure compared with 9 percent in China, 8 percent in India, 5 percent in Europe, and 4 percent in Mexico.

Several times Blumenthal brought up his desire for a federal infrastructure bank, a public-private partnership fund, to address the issue. He added his confusion as to why more companies weren’t advocating for a more reliable infrastructure system since many companies rely on it to export their products.

Several witnesses discussed their own issues with challenges in domestic transportation infrastructure. Cargill’s Norman Bessac said once the labor dispute is resolved, it could take a month go get caught up with shipments of chilled product and three to four months for frozen product. Katie Farmer with BNSF Railway Co. said many of the locomotives and other equipment added to the company’s system to deal with the rail backlog from the 2013 grain harvest are now sitting still because of issues at the ports. She said the containers that typically haul grain or other products west aren’t returning east as quickly, slowing their abilities to move grain in their own system.

Farmer also pointed out longstanding issues with the Southern California International Gateway, an off-dock facility 20 miles closer to the San Pedro port complex than their current facility, where BNSF takes its shipments by rail. In her testimony, Farmer said this closer facility would be the “greenest intermodal rail facility ever constructed and eliminate millions of truck miles annually” on the I-710 freeway between the ports and downtown Los Angeles.

The permit to build the facility is held up by a legal battle with local groups opposed to the project, Farmer said, using the project as an example of bureaucratic stalling points for infrastructure developments.

John Grueling, a board member for the Coalition for America’s Gateways and Trade Corridors, testified that America should consider a different infrastructure strategy rather than frantically addressing different choke points within the system. He said that shortchanges the potential of American goods and their ability to get to export markets.

“What’s unfortunate about that is America has a distinct and very unique advantage in this global marketplace, and to think that our transportation system is one of the primary reasons that we’re being held back – both on imports but more importantly on exports – is almost criminal,” Grueling said. “It’s a shame. And I think that there’s a lot that we can do better to help with that situation."

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