The election factor

The election factor

Left to their own devices, longshore labor and management at West Coast ports would likely have averted the total shutdown that occurred the last time the two sides sat down to hammer out a collective bargaining agreement. By any measurement, the atmosphere this year is far less poisonous than it was in 2002. Add to the mix the fact that the negotiations coincide with a hotly competitive presidential campaign, and the chances for a meltdown are almost nonexistent.

The staffs of the International Longshore and Warehouse Union and its management counterpart, the Pacific Maritime Association, set regular pilgrimages to Washington, where they make the rounds on Capitol Hill and within the administration. During the past year, both sides were delivered essentially the same, unequivocal message: Negotiate as hard as you want, but get an agreement done, and do it without disruption.

"I think both of us have gotten the very strong message that neither political side wants to see anything happen that would impede commerce or have a negative effect on a very fragile economy," said Jim McKenna, PMA president. "With that, we are committed to getting in, doing what we need to do, resolving the contract and getting out without any disruption."

Conversations with a number of people knowledgeable about the PMA-ILWU arena all point to the same conclusion. A work stoppage would create national headlines, not to mention harm the economy if it were protracted, and that would reverberate negatively on the parties' candidates and their critical messages about the need to strengthen the economy. A work stoppage would arguably hurt the Democrats more because, without understanding the nuances of this negotiation, the public would tend to assign blame to the union before management.

Many still refer to the 10-day shutdown in the fall of 2002 as a strike when in reality it resulted from a management-imposed lockout. It's hard to see the union risking damage to its relationship with the Democratic Party or its nominee by provoking another lockout or otherwise instigating attention-getting antics. Some interpret the union's agreement to begin negotiations two months earlier than normal as a sign of assurance that no fireworks will be forthcoming from the union this year.

The political factor comes on top of the amicable atmosphere that many perceive between the union and management. Six years ago, management under Joe Miniace seemed to systematically lay the groundwork for the breakdown to come, especially in Washington. It didn't help that there was visible animosity between Miniace and then-ILWU President James Spinosa. Jim McKenna of the PMA and Bob McEllrath of the union are of a different mold from their predecessors, and it shows.

"The environment in which the union and management groups are working is much different - less confrontational and more positive," Brad Dechter, president of DHX-Dependable Hawaiian Express, wrote in this year's JoC Review and Outlook. It also can't be overlooked that the competitive environment is much changed since 2002; cargo growth has slowed to a crawl, and shippers continue to divert cargo to East and Gulf coast ports.

The problem with a cool-headed environment is that a disruption-free contract may result, but real progress is absent. Terminals have been slow to implement all of the technology they were permitted in the 2002 deal. But they still need more flexibility out of the union, particularly in how work teams are assigned. They need the ability to shift gangs between ships and rail, and to keep gangs working even if their original job is completed.

Only with progress on issues like those will West Coast terminals begin to reverse what is widely regarded as a dismal productivity record. With West Coast terminals handling 5,000 TEUs per acre per year, versus 10,000 at world class terminals, and 25 crane moves per hour versus 35 elsewhere, "The bottom line is that U.S. West Coast facilities are not as productive as they need to be," Bill Rooney, managing director of the U.S. headquarters of Hanjin Shipping, wrote in the Review and Outlook.

It's a long way to July 1 when the existing contract expires, and a lot can happen. "Shippers and liner operators will be on edge until an agreement is reached," wrote Tom Simmers, president and chief executive of Ceres Terminals. "Industry and labor come to the table with new leadership, and early signals are promising. But there is a long road yet to be traveled."