The action last week by Portland’s harbor commissioners to ensure the port shares in the costs that terminal operator ICTSI incurred because of longshore labor actions in June was a business decision designed to protect a vital asset, said Bill Wyatt, Portland executive director.
ICTSI operates Terminal 6, Portland’s only container terminal, and the company experienced a significant loss of revenue when International Longshore and Warehouse Union productivity at the facility declined and vessel operators diverted ships to other ports.
These developments harmed ICTSI as well as the port authority. “Their success is our success, and their failure is our failure,” Wyatt said. Maintaining a lease with a private-sector terminal operator is necessary for the long-term viability of the port’s container franchise, Wyatt said.
Portland charges that productivity at Terminal 6 plunged and long lines of trucks formed for days at the terminal gates when the National Labor Relations Board in late May held a hearing in Portland to determine a jurisdictional dispute between the ILWU and the International Brotherhood of Electrical Workers over what amounts to two full-time jobs handling refrigerated containers.
The ILWU denies productivity dropped because of actions by its members. However, Hanjin Shipping, the port’s largest container line, began diverting its vessels and only recently returned to Portland when productivity returned to normal. Hapag-Lloyd bypassed several calls at Portland.
Portland’s harbor commissioners last week voted 6-1 that the port authority should share in the cost of ICTSI’s lost revenue up to an amount not to exceed $4,664,356. ICTSI Oregon will submit documentation for port review and approval of shared costs from June 1 to Dec. 31, 2012.
Examples of increased labor costs because of decline in productivity include additional gangs for vessel operations, gate closure when labor had already been hired, re-handling of export loads left on deck and keeping the terminal gates open longer than would normally be necessary.
Lost revenue would include cargo not loaded on or discharged from a vessel and net loss of revenue because of ship diversions to other ports. The port said lost revenue and increased costs are quantifiable.
The ILWU opposes any cost-sharing arrangement. “Why are officials at the Port of Portland abusing the public trust by giving ICTSI a subsidy of $4.7 million when the company reported profit last year of $130 million and has a history of mismanaging its personnel operations in Portland? This seems like a gigantic and irresponsible waste of public funds,” said Leal Sundet, ILWU coast committeeman.
Sundet did not elaborate on his charge that ICTSI is mismanaging its personnel operations in Portland.
The NLRB on Aug. 20 is scheduled to resume a trial into the jurisdictional dispute.