East Coast ports benefit by labor slowdown in the West

Losses for the West Coast ports have been a boon for their East Coast counterparts as labor strife has stymied growth due to diverted cargo and lost contacts.

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Losses for the West Coast ports have been a boon for their East Coast counterparts as labor strife has stymied growth for Pacific shipping terminals due to diverted cargo and lost contacts.

The Puget Sound Business Journal reported on the East Coast surpassing the West due to international companies choosing to avoid bogged-down ports.

In the quarter before the slowdowns began, West Coast ports had more growth than East Coast ports. That traffic directly corresponds with slowdowns, according to Fitch Ratings, an agency that determines credit ratings at United States ports. In the fourth quarter of 2014, East Coast ports had more growth than any of the 11 previous quarters.

“With each labor event, some diverted cargo has not returned, and this seems to be the case for some West Coast ports coming out of this most recent contract negotiation,” according to Fitch.

Port of Portland Terminal 6’s largest client, Hanjin, announced about three weeks ago that it would stop calling on Portland — representing a loss of 76 percent of the terminal’s container traffic. Read Portland economist Joe Cortright argue why that isn’t as big of a loss to the Oregon economy as some would suggest.

In an interview with KGW Friday, President Barack Obama said he will contact Hanjin about reconsidering their decision to stop calling on Portland.

You can watch the video at OregonLive.com:

Likely, Obama won’t be able to convince Hanjin to rescind the announcement that no more ships will stop at Portland after March 9. But, many in the agriculture and export-related industries in Oregon agree with him that the dynamic between the Pacific Maritime Association, which represents port operators, and the International Longshore and Warehouse Union, who keep the ports running, needs to change.

The Los Angeles Times published a report Sunday titled “How longshoremen command $100K salaries in era of globalization and automation,” in which reporters Chris Kirkham and Andrew Khouri examine the port union’s successes in maintaing high wages in the face of technology threatening to eliminate loading jobs.

The report said that about half of union longshoremen’s salaries exceed $100,000 a year — with some being as high as $300,000 in Southern California — with free healthcare.

Longshoreman pay dwarfs that of almost all other transit employees, such as trucking, railroad or airline workers. At massive warehouse complexes in the Inland Empire, just an hour’s drive from the ports, goods for the nation’s largest retailers are shuttled around by temporary workers making as little as $10 or $11 an hour, with no benefits or job security. The unique clout of the International Longshore and Warehouse Union came into sharp relief recently with the partial shutdown of 29 West Coast ports. The crisis passed with a contract deal a week ago, but it will take up to three months to clear the backlog of cargo on the docks and ships stranded offshore. Many businesses and workers won’t recover the money they lost because of port gridlock.

Union spokesman Craig Merrilees said the shipping companies’ pay figures fail to account for the more than 8,000 so-called casual workers — part-timers who don’t receive benefits and often work for years to become registered union members. The data, released by the Pacific Maritime Assn., reflects 90% of the “registered” union members, or more than 12,000 workers.