Dock strikes pose export issues

Dock strikes pose export issues

- ILWU members working without contract since Sept. 30. - Workers returned to Northwest grain terminals last week despite impasse. - S

LABOR disputes with two different unions on opposite sides of the country threaten the U.S. grain export sector, with a strike pending in the East and an impasse percolating in the Pacific Northwest.

While the situations are different, each poses a significant challenge to shipping U.S. products and commodities abroad in 2013.

Grain shippers in Washington and Oregon worked through Christmas to negotiate a mutually acceptable labor agreement with the International Longshore & Warehouse Union (ILWU), apparently to no avail.

The Pacific Northwest Grain Handlers Assn. (PNWGHA) declared a formal impasse in contract talks Dec. 26, and although workers returned to work last Thursday, the dispute is far from resolved.

The association, consisting of Louis Dreyfus, United Grain Corp. and Columbia Grain, represents four of nine grain shipping terminals in the Pacific Northwest and has typically negotiated a single collective labor agreement with the union.

Temco, a joint venture between Cargill and CHS, operates two terminals in the region. Until recently, Temco was a member of PNWGHA, but media reports indicate that Temco has not been mentioned in the latest association statements on the negotiations, suggesting that Cargill and CHS are negotiating their own deal with the laborers.

Cargill spokesman Mark Klein said the company does not discuss contract negotiations publicly and would not comment on the matter.

More than one-quarter of all U.S. grain exports and up to half of U.S. wheat exports move through the Columbia River and Puget Sound grain terminals, according to industry estimates.

ILWU members -- more than 3,000 in total -- voted on Dec. 24 to reject PNWGHA's "last, best and final" contract proposal.

The union said its members would go back to work Dec. 27 despite what it called "the substandard provisions of the employers' last offer" -- a move some labor experts called the next step in a possible unfair labor practice lawsuit.

At issue are the terms of a new labor contract -- workers have been operating without a contract since the end of September -- and what the employers called "concessionary terms." It appears that money is not actually the sticky wicket because the latest offer would increase hourly wages to a range of $34-36, with an additional $30 per hour for benefits.

The PNWGHA offer called for additional flexibility in scheduling workers and ending the practice of paying union members a half-hour of wages for "working as little as six minutes," according to the statement declaring the impasse. Union leaders said those and other similar requests were too extreme.

 

East Coast strike looms

While possibly less burdensome to grain and oilseed shippers, the potential for a "container cliff" crisis is brewing on East Coast and Gulf Coast terminal docks.

The International Longshoremen's Assn. (ILA) originally had set a Dec. 30 strike date that potentially could affect container shipments at 14 ports stretching from Boston, Mass., to Corpus Christi, Texas.

However, the Associated Press reported late last Friday that the union had agreed to operate under the current contract for another 30 days, averting immediate calamity for the time being.

Following a breakdown in negotiations Dec. 19, ILA announced the strike as the next step in brokering a new six-year master contract with the U.S. Maritime Alliance. The strike would primarily affect containerized shipments, not the bulk vessels through which most grain and feed commodities are shipped.

According to the National Grain & Feed Assn. (NGFA), U.S. Department of Agriculture data show that in 2011, containers were used to transport 7% of total U.S. waterborne grain exports, a growth of 2% over 2010. Ninety-six percent of those shipments were bound for Asia, although the data don't clearly delineate the ports of origin for those exports.

Other export-reliant feed industry sectors also could be affected by a strike.

Renderers, already dealing with a glut of product at the year's end, are concerned about being able to ship containers of feed ingredients to customers overseas.

"We're preparing for at least a weeklong delay," said Doyle Nauman, a protein merchandiser with Griffin Industries. "Containers on the West Coast are going to be harder to source because of additional congestion from the strike."

He said some shippers anticipated premiums of as much as $400 per container if the strike occurs.

ILA, in its strike notice, said it would honor orders to handle perishable commodities, non-containerized cargo, military shipments, containerized mail, automobiles and passenger ships.

According to the Maritime Alliance, the major unresolved issue in the stalled talks is the container royalty, the $4.85-per-ton supplemental payment the longshoremen have received for five decades but that port officials say hurts their competitiveness.

If the strike occurs, it will be the first ILA strike in 35 years.

More than 100 national, state and local trade associations wrote to President Barack Obama urging him to invoke the Taft-Hartley Act if necessary to prevent a strike from occurring.

A 10-day lockout on the West Coast in 2002 cost the U.S. economy $1 billion per day, according to estimates from the National Retail Federation. President George W. Bush invoked the Taft-Hartley Act to end that strike.

The letter to Obama was signed by a number of agricultural organizations, including NGFA, the Agricultural Retailers Assn., Agriculture Transportation Coalition, American Farm Bureau Federation and American Meat Institute.

Volume:84 Issue:54

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