For 14 weeks, 29 West Coast port terminals from San Diego to Seattle have been operating at a diminished capacity as the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) negotiate new contracts for all employees. The organizations have told the public that they have been close to an agreement for weeks, but the dispute continues and every minute costs American retailers. Some estimates even put the number at $7 billion in 2015.
Meanwhile, U.S. food producers are bearing the brunt of the collateral damage: The North American Meat Institute estimates that the meat and poultry industry are losing $40 million per week due to the slowdown. California Citrus Mutual estimates that California citrus growers have already lost 25% of their export opportunities for the year. The Washington State Potato Commission reports that $23.5 million in frozen french fry exports have been lost every month since November.
The point is, U.S. food producers and growers can't afford to keep losing product and profits due to two organizations battling each other in a wage negotiation. At some point, both the ILWU and PMA need to worry about diminishing returns. As service slows (and in some cases, completely stops), customers will search for new avenues to move product. An improved pension system and higher salaries may be a great short-term win, but will ultimately mean nothing if shipping companies leave and force layoffs at the ports.
The local economy in Portland is already feeling the heat, as Hanjin Shipping Co. will be terminating operations at Terminal 6 in the Port of Portland after concerns about the slowdown have forced them to search for greener harbors. This has left farmers as far away as Idaho scrambling to find new export opportunities. In some cases, farmers are turning back to the domestic market. Agricultural groups are asking Congressmen to do something about the ports, who are in turn imploring President Obama to use the Taft-Hartley Act to help end the slowdown.
It would be wise for both parties to find some common ground before there's nothing left to ship at their ports.
[Editor's note: OFW Law Principal Attorney Michael J. O'Flaherty provided this blog piece regarding the need for federal oversight regarding the ongoing trend of class action lawsuits filed against food companies regarding product labeling.]read more
Chris focuses on fresh, canned and frozen fruit and fresh and dried vegetables for the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He is a proud Rutgers University alumnus with a degree in English, and has a background in web writing for a variety of industries, including legal, foodservice and small-to-medium sized businesses. In his downtime you can find him watching New York Yankees baseball, hiking, enjoying live music and spending time with his dog Kaiden. He invites you to contact him via email at firstname.lastname@example.org to talk about anything food-related.
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