LA/LB Ports-THE PERFECT STORM

What a mess!

When I was graduated from Massachusetts Maritime Academy decades ago as a Deck Officer I did not realize, at the time, that I benefited from the two most important things one can take away from a college education: the ability to work with others and the skill of being always eager to learn.  I have always felt that these two traits were the most important things are young adult can take away from a college education.

 For much of my life I took these gifts for granted and thought that most people had received the benefit of this education as well.  But unfortunately the debacle that continues to go on at the ports of Los Angeles and Long Beach is the sad testimonial that many people do not have the benefit of this knowledge.

 Generally, because people like to place blame, the ILWU gets the brunt of the criticism.  Now it would only take a reasonably competent individual with basic common sense to realize that the labor situation at the ports is totally out of control, self-centered and not at all customer minded and subscribe to the belief that the bubble will never burst.  But I believe that labor is not the root cause.

 Now, what would I say something like that?  Well first of all, in my humble opinion, the last true visionaries in international transportation were Malcolm MacLean and Fred Smith (fortunately Fred is still with us).  They were able to look at the big picture over the long term.  Unfortunately today, because transportation lacks senior management with inspired vision, the focus is how do we squeeze a nickel even harder?  They resort to mergers, alliances, conferences, vessel sharing, terminal sharing-almost anything that does not require creativity.  Even down to labor negotiations.  Rather than negotiate their own individual arrangements with labor for mutual benefit, they have created a third-party to negotiate for all the employers.  All these approaches do nothing but prop up the weaker carriers and terminal operators and hold the entire customer base at ransom.

 From the labor standpoint during the current donnybrook, the real issue is that the ILWU had made limited concessions during the last negotiations to allow automation began to enter into the West Coast ports.  Now if one does the research, they will find that the productivity at West Coast ports is embarrassingly low compared to international standards and that the pay range here in the West Coast is so high, for such poor productivity, that it is embarrassing for us in the industry.

 But as I intimated above, I do not blame the unions.  If management had done a decent job over the years, the individuals would not want nor need a union.

 And when you look at the current situation, the employers knew years ago that contract negotiations were coming up, what the issues would be and that there might be a resulting strike or lockout.  But did the employers have a contingency plan for a strike or lockout?  Of course they did not.

 I once worked for a ocean carrier in the East Coast that was nonunion because the company took very good care of the employees.  But all white-collar employees were required to learn how to operate various pieces of equipment so that in the event existing labor was not available, the operation would continue to go on, albeit at a slower rate, but the service would continue for the client.

 I remember many years ago when the Florida East Coast Railroad was in the middle of a strike, and that even the salesman operated everything because they were prepared to do so.  A friend of mine operated the drawbridge in Palm Beach County that allowed the trains to pass when necessary, but opened for the boats transiting the intercostal waterway.

 So with the situation here in Southern California, the powers to be have more or less insured that everyone will be a loser.  Already businesses who pay the carriers, terminals and ultimately the employees, hundreds of millions of dollars, are looking for alternatives; customers to be lost.  It seems to be lost on the ILWU that the widening of the Panama Canal will be completed sooner than one thinks.  My estimate is that up to 40% of the volume now going through the West Coast, will be diverted through the canal for the benefit of Gulf Coast and South East Coast US ports.

 It is sad that these interests are so intent on shooting themselves in the foot, but what is even sadder is that both sides seem not to think about the harm they are doing to the customers.

 Just my opinion.

 Hud Warren

 International Trade Consultant

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