An annoyance. A sideshow. A spectacle? All that, for sure. A serious threat to the West Coast as a port gateway? Not a chance.
It’s impossible to view threats by the Occupy Wall Street movement to shut down West Coast ports on Dec. 12 in any other light. Might the movement succeed in creating trouble and perhaps delaying some cargo? Probably, given that thousands of protesters successfully shuttered the Port of Oakland in early November.
But unlike a well-known earlier instance in which the West Coast ports were shut down for 10 straight days nearly a decade ago, any disruption this week would be of a different nature entirely — imposed from outside the industry rather than from within. In today’s world, that’s the only way it could happen.
The Occupy-led shutdown attempt illustrates how far the West Coast has evolved in the past decade — from a disruptive, unpredictable and risky port range into one that is, relatively speaking, peaceful, focused and competitive. In other words, it’s hardly an environment from which shutdowns emerge.
It wasn’t always that way. It used to be if there was any port disruption, it came from the battles within the industry between factions that couldn’t see beyond their narrow interests. Today, industry on the West Coast would be the last to initiate a shutdown. And, given the growing competitive threats from Canada and the East Coast, and volume turning negative in recent months, any disruption at this point would be particularly unappreciated.
That’s why we have seen barely concealed hostility from the International Longshore and Warehouse Union to the Occupy movement’s threat to shut down the ports and deny their members work. “To be clear, the ILWU, the Coast Longshore Division, and Local 21 are not coordinating independently or in conjunction with any self-proclaimed organization or group to shut down any port or terminal,” the union said in a statement.
To put this in perspective, the docks on the West Coast today are very different from the era of the 1960s through the 1990s, when container volume soared and work was plentiful. Union violence erupted at the EGT grain terminal in Longview, Ore., but that had nothing to do with containers. If the union loses that fight, it could be the beginning of a long-term shift to nonunion labor at West Coast bulk terminals as occurred long ago on the Gulf Coast. So from the ILWU’s perspective, the EGT battle is literally a fight to the death. Agree with the union or not, but that’s where its coming from.
In the container world, the trend on the West Coast has been toward less disruption, less controversy, less tension and fewer headlines — basically, a more peaceful and stable waterfront that shippers can depend on. The idea of outsider-sponsored disruption is out of step with the current environment at the ports.
That new environment is driven by harsh new realities. Labor and management know the days of never-ending volume growth are over. The recession was a shock to many ILWU members who for the first time showed up for work only to find berths empty and no work to be had, such had volumes dried up.
Add to that the loss of market share in imports to East Coast ports (now mostly recovered), growing competition from Canada and the potential of fresh market share loss to the East Coast after the Panama Canal is expanded in 2014. And there are new worries, with volume falling year-over-year at Oakland, Los Angeles and Long Beach in the August-October period.
That has brought labor and management together in new ways. Both had a hand in persuading the Federal Maritime Commission to investigate diversions of U.S.-bound containers through Canadian ports such as Prince Rupert and Vancouver, and labor and management are on board with, or at least not opposing, efforts to impose a new tax on containers diverted through Canada.
The union is especially mindful of perception. You didn’t see the ILWU supporting the Teamsters in its efforts in recent years to impose an employer-driver mandate on drayage drivers at LA-Long Beach. That would have raised new questions among shippers about the stability of West Coast ports, and the longshoremen wanted none of it, and rightly so.
That was a sign, like the ILWU distancing itself from the Occupy protests, that the union increasingly understands the precarious competitive position of West Coast ports, that cargo isn’t guaranteed the way it used to be, and one way to scare off shippers would be to return the West Coast to the bad old days of waterfront warfare.
If there is to be a port shutdown, shippers should know that unlike in the past, this one would be imposed from outsiders who probably have never visited a seaport. That is a change that deserves to be noted.
Peter Tirschwell is senior vice president of strategy at UBM Global Trade. Contact him at firstname.lastname@example.org, and follow him at twitter.com/PeterTirschwell.