Strong container volumes through West Coast ports this year is good news for longshoremen who suffered through an unprecedented period of declining work opportunities in 2009.
“We’re cautiously optimistic and hope that the volumes and man-hours will continue to grow,” said Craig Merrilees, a spokesman for the International Longshore and Warehouse Union.
He added, however, “There are still a lot of casuals not working.” Casuals are part-time longshoremen who only pick up hours when there aren’t enough “A” and “B” card longshoremen — dues-paying registered workers — to handle the workload in any particular shift.
Up until 2009, West Coast dockworkers enjoyed a 20-year run of workplace strength. Although the trans-Pacific trade experienced up and down cycles over that time, the down cycles equated to single-digit growth instead of the normal double-digit growth.
During the first nine months of 2009, container volumes plunged an unprecedented 19 percent, and ILWU man-hours plummeted 23 percent, according to figures published on the Pacific Maritime Association’s Web site.
The employers’ association had to make payments under the Pay Guarantee Plan to idled longshoremen in the larger container ports, a sign of just how bad things were. PMA President Jim McKenna said the payments weren’t large, but it’s rare for employers in big ports such as Los Angeles and Long Beach to have to pay workers who show up for work and find none.
Under the waterfront contract, longshoremen who show up for work each day are guaranteed up to 38 hours of pay a week depending on their status. PGP payments are rather common in small breakbulk ports, given the ebb and flow of those cargoes, but at the container ports, registered longshoremen reporting to the hiring hall each day could always find work because of the growth in container volumes since the 1980s.
After a disastrous 2009, work opportunities this year are edging back to normal. Container volumes in the first nine months of 2010 are up 15 percent compared to 2009. Payroll numbers through Oct. 22 show man-hours on the docks up 16 percent year-to-date.
Cargo volumes and work opportunities are still underperforming by historical standards, however. Virtually all registered “A” card longshoremen found five days of work each week this year, as did most of the “B” card longshoremen; casuals, however, averaged about two days each week during the busy months. Now, as the trade is entering the traditional slow period, casuals are down to one day a week.
Accumulating man-hours is important to casuals because that’s how they eventually qualify for “B” cards and the medical and pension benefits that come with being a registered longshoreman. If work opportunities languish for an extended period, casuals leave the industry and find work elsewhere.
For terminals to respond to spikes in cargo volumes, maintaining an adequate pool of casuals is important. The PMA learned this lesson in 2004 when congestion on the intermodal rail networks backed up containers on the docks. Congestion at the ports in turn created demand for more dockworkers to dig the terminals out.
The employers’ group discovered, too late, that the casual work force had become depleted over the years, and dozens of jobs each day went unfilled, resulting in the horrific congestion and delays at the terminals in 2004.
The PMA since then has established a system of metrics to flag any impending shortage of casuals. Right now, the system indicates “we’re in pretty good shape,” McKenna said.
West Coast ports still have a way to go before they are back to the peak years of 2007-08. PMA statistics show container volumes this year are down about 8 percent from the peak, and man-hours are down 19 percent.
Much of the imported merchandise for the upcoming holiday season already has cleared West Coast ports, and the trans-Pacific trade is moving into the winter slack period. Vessels that operated at full capacity in August and September are now at less than 90 percent utilization, and advance bookings for the rest of November indicate utilization factors will drift down toward 80 percent.
In this environment, carriers are likely to reduce vessel deployment, suspend voyages and, in some trade lanes, entire vessel strings. That means man-hours on the docks will decrease further until imports pick up in the spring.
The market, however, isn’t expected to drop anywhere near as low as it did in 2009. Shipping lines are projecting growth of 5 to 6 percent in 2011 over 2010.
Contact Bill Mongelluzzo at firstname.lastname@example.org.