West Coast Strikes Spur Preemptive Labor Talks

The West Coast ports have been open for business for months, but they are still reeling from the closures and heavy congestion that have left their once-booming ports with dwindling traffic. The strikes affected every manufacturing industry in the U.S., leaving agriculture rotting at ports and forcing large factories to cut production. Not only have the port numbers been affected as manufacturers divert their goods elsewhere, but analysts have blamed the strikes for the entire country’s dismal first quarter GDP posting, coming in at -0.7 percent.

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Since the beginning of 2015, traffic to West Coast ports has decreased 12 percent. East and Gulf Coast ports, however – such as New Jersey, Savannah, and Charleston – are benefitting from that loss. Their traffic has increased significantly since the West Coast strikes began, and many of the ports are handling increased shipments with ease and efficiency. According to PIERS by Journal of Commerce, container volumes at East Coast ports grew 12 percent in April, and volumes at Gulf Coast ports grew 20 percent. Many businesses may be unwilling to risk doing business with West Coast ports again, despite renewed contracts. These ports are also better equipped to handle large ships, and Long Beach and Los Angeles are having trouble dealing with growing container sizes.

Acting Up

On Friday, a Bill was introduced to the Senate that would allow the government to intervene in port issues such as strikes and labor shutdowns. The PORTS Act invokes the Taft-Hartley Act, a controversial trade bill from the 1940s that restricted the power of labor unions. Sen. Cory Gardner, R-Colo. and Sen. Lamar Alexander, R-Tenn., sponsored the Bill; while it is not expected to pass, the PORTS Act serves as a protest against the power of labor unions to affect the economy so drastically. In a statement, Sen. Gardner said that “Labor union bosses should not be allowed to hold the economy hostage, nor should they be allowed to use the livelihoods and jobs of millions of Americans as bargaining chips.” Over 100 businesses have voiced their support for the Bill. However, because of the left-leaning governance on the West Coast, legislative bodies are unlikely to circumvent labor unions’ rights. Still, the existence of the Act displays serious worries from Congress about the fragility of U.S. ports. No one wants this happening again – but a few East Coast ports are taking steps to stop any strikes in their tracks.

In 2013, two large labor unions representing East and Gulf Coast port workers passed a six-year Master Contract, which included agreements on wage increases, starting pay, and job protection, among other stipulations. Certain aspects of the agreement were left up to local ports to hash out. Now, in order to preemptively avoid any issues that may arise, the labor unions have decided to begin talks with East and Gulf Coast ports three years ahead of schedule. The two groups are looking for a solid, long term agreement to ensure stability and fairness. The talks should allow plenty of time for workers to understand and engage in conversation around their rights and compensation. Especially with larger, more unwieldy ships becoming more popular, and automation a growing trend, working at ports is going to get stressful and chaotic.

This news should come as a comfort to manufacturers, and a model for ports. Dealing with potential issues before their consequences are imminent allows for transparency and gives manufacturers time to make informed decisions about where to send their products. Hopefully, three years will be enough time for both sides to come to a sound agreement.

Read our recent reporting on the port strikes here.

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