AgTC: Statement of the Agriculture Transportation Coalition

To anyone reading this blog, this is a fantastic statement by the AgTC to explain the current situation between the ILWU/PMA, the struggles that Agriculture has and will continue to have, and the outlook of the West Coast ports depending on how these negotiations go. -Shelly

AgTC: Statement of the Agriculture Transportation Coalition
Initiation of Federal Mediation of West Coast Port Contract Dispute

January 6, 2015

Contact: Peter Friedmann, Executive Director, executivedirector@agtrans.org

Abigail Struxness, Program Manager, abigail@agtrans.org

202-783-3333

www.agtrans.org

The AgTC appreciates that the Federal Mediation and Conciliation Services has now undertaken to help the International Longshore and Warehouse Union (ILWU- representing the longshore workers) and Pacific Maritime Association (PMA- representing the marine terminal employers) resolve differences. FMCS Press Release. This is an essential step, as the injury caused by port labor slowdowns, walk-offs and disruption has rendered West Coast ports dysfunctional. Months ago exporters and importers asked the White House to get involved. The result of the West Coast port disruption over the past 6 months has been hundreds of millions of dollars of lost sales, cargo damage, and lost customers to US agriculture, manufacturers, farmers, and retailers, not to mention lay-offs in each of these sectors. This disruption and injury continues today.

The AgTC seeks from this Mediation, not just any new contract between the ILWU and PMA. While that would provide temporary relief, it would not lead to improvements in port operations that are essential to meet the challenges facing west coast ports and the importers and exporters dependent upon them. The AgTC presented to the President of the ILWU and the PMA a comprehensive list of what’s at stake for West Coast ports, as negotiations began last year. Those challenges are still very much in play as the Mediation begins. Open Letter to the ILWU and PMA.

The Agriculture Transportation Coalition’s membership includes companies that represent virtually all agriculture and forest products exported from the United States, as well as imports of these products. These products are grown, raised, processed, packaged and shipped from all regions of the U.S. to markets worldwide, where they typically face competition from similar products sourced elsewhere. The AgTC was founded on the following principle: “There’s nothing that we produce in agriculture and forest products in this country, that cannot be sourced somewhere else in the world. If we cannot deliver affordably and dependably, those foreign customers will find alternative sourcing, and it may never come back to the US suppliers.”US agriculture requires efficient West Coast ports if we are to compete with agriculture producers in Brazil, Mexico, Canada, Australia, Chile, etc. in selling to the Asia markets. When US marine terminals are shuttered, and when lack of automation (which is standard at world-class ports outside the US) renders our terminals slower and undependable, then agriculture, which depends upon these ports for access to world markets, suffers great and permanent loss.

For our US exporters and importers, continuing West Coast port disruption and inefficiencies, unless rectified, are already leading to two very bad results – neither in the interests of US exporters, importers or the US economy as a whole. Unfortunately, both have been very much in evidence and accelerating over the past year:

  1. Supply chain managers are forced to divert cargo to East and Gulf US ports and/or to Canadian ports (more detail provided in the Open Letter.) Much of this diversion is now permanent and will not come back to the West Coast ports even after the current dispute is resolved.
  2. Foreign customers are forced to shift their purchases of hay, apples, cotton, lumber, citrus, meat, dairy, almonds, etc., to suppliers of the same products located in other countries.  This too has been occurring with increasing frequency, and are often permanent. For example, when the west coast ports were shut down 12 years ago, Japan candy producers were forced to shift purchases of almonds from California growers, to Turkey, and some of that business still has not, and likely will never come back to the US.

So we hope the  ILWU  is not entering this mediation with the objectives of increasing cost of  port labor (already the highest in the world; according to published contract terms, ILWU workers make an average of $147,000/year, with full medical – no copay, no deductible, no limit, plus pension, etc.), preventing full automation of the terminals, maintaining antiquated practices such as the hiring hall and closing terminals during lunch hours (long discarded in all other industries), and now expanding these costs and inefficiencies to chassis maintenance and repair.

If the ILWU is successful in achieving these objectives during the current mediation, they will be successful in accelerating the diversion of cargo away from the US west coast ports, forcing foreign customers to stop buying from US farmers, growers, packers and food processors, driving cargo away from US west coast ports, and ultimately denying their own children the good jobs at the terminals.

One of the key issues that will be subject to the current mediation relates to jurisdiction over the chassis (these are the trailers on which the ocean cargo containers are placed) maintenance and repair.  This critical function simply cannot be handled in the same way that West Coast port operations have been handled over the years.

Following is a current, quite alarming report about chassis maintenance:

“Our company is one of many exporters trucking products to the ports of Los Angeles and Long Beach on a daily basis.  We have dealt with numerous issues pertaining to the current labor slowdown by the ILWU, costing us hundreds of thousands of dollars in lost sales and time wasted.  One recent problem we are experiencing is not only appalling, but amounts to outright theft.  We’d like to share our story.

About a year ago, we began making plans to start managing our own chassis program for our trucking operation, as we knew shipping lines would soon be getting out of the chassis business.  For years we had been reliant on equipment that was provided by the shipping lines as part of our service contract.  While the allure of a “free” chassis was appealing, in reality, we were spending approximately $70,000 per year on tire repair of port chassis.  As any trucking operation knows, the tires on port chassis are generally in poor condition, as each operator nurses the tires along just enough to get the container delivered, leaving any lasting problem to the next lucky recipient of that particular chassis.

In order to begin our chassis management program, we experimented with purchasing our own new chassis, as well as entering into a long term leasing agreement with one of the larger port chassis providers, in order to determine which type of equipment best suited our operation.  The equipment we purchased was in excellent condition, as everything was brand new.  In general, the leased port chassis were in good condition, except of course, for the tires.  Over the next few months we began replacing the “junk” recapped port chassis tires with other tires that while were not new, were in much better condition.  There was a great deal of expense incurred to conduct this project, however, we believed it would benefit us in the long run.  Sure enough, once this tire replacement program was complete, we saw a nearly 90% reduction in our tire repair costs.

Two weeks ago, one of our truck drivers was leaving a terminal in Los Angeles after picking up an empty container.  He was stopped at the exit gate by a terminal worker and told that his chassis needs to be inspected for safety purposes.  This particular chassis was one of the leased units we did not own, but have thoroughly maintained.  It also recently completed its annual inspection by the California Highway Patrol, and passed without incident.  However, on this day, it was deemed unsafe by this particular terminal worker and received an “OUT OF SERVICE” tag.  Our driver was instructed to report to the maintenance shop to receive replacement tires before being allowed to leave the terminal.  The maintenance shop, at their own pace, removed our tires, and replaced them with…you guessed it…”junk” recaps-the same type and quality we had spent months, and tens of thousands of dollars to replace.  In effect, they stole our tires from us.  Two days later, that same chassis had two blowouts, from tires that were replaced by the terminal.  So much for safety.

I wish we could report this as an isolated incident, however, in the last two weeks, this situation has repeated itself on numerous occasions.  At this rate, the terminal will have undone in weeks what it took us months to accomplish.  This is just one of many similar costly stories that goes unreported during this contract negotiation period.  Our industry cannot continue to operate this way.  Changed is needed…soon.”

Why this affects you.

The current port crisis isn’t just an Agriculture issue – this is an Oregon issue, a Pacific Northwest issue, an American issue.

Ag picture

We are a couple decades removed from the general public knowing their local farmer, understanding the farmer’s plight, respecting the neighboring farm, and supporting the farm families. We – the general public – have simply become urbanized, and have lost touch with what happens outside the city borders – people have lost touch with what goes on in rural America, and in doing so, what it takes to provide the food on their table, the textiles that make the clothes they wear and the seed that they use to plant their lawns and gardens. Critics of modern production agriculture are pushing the negative idea that we are all “corporate farms”, but the U.S. Department of Agriculture (USDA) reports the vast majority of farms and ranches in the United States are family owned and operated – in fact, 93 percent of the 2.1 million farms in the United States are family owned (http://findourcommonground.com/food-facts/corporate-farms/). There are blogs going around that the wheat we eat is poison. Since when? From the words of my farmer friend Brenda: “I want to tell you a short story about how we check our wheat before harvest to see if it’s ready, and also during harvest to make sure that the moisture is right.  We grab a handful (with our bare hands) and we toss kernels into our mouths and we eat it.  This practice has been done for generations.  My grandpa ate wheat straight from the field, straight from the combine, my dad has, and I do as well.  You would think that if anyone is going to come away from this whole conventional wheat experience with a toxic disease it would be us…but we don’t.  We are all healthy as horses, because what we are growing is safe and healthy.  Now I know as much as anyone that this isn’t scientific, but it does show how much we trust what we are doing out here in the fields.” (For more information on this topic, see: http://nuttygrass.com/ or http://prairiecalifornian.com/truth-toxic-wheat/)

Agriculture is important to us as Oregonians and as Americans. From the words of our Governor Kitzhaber: “Agriculture remains one of Oregon’s economic bright spots, creating about 1 in 10 Oregon jobs, with a $5.4 billion production value equal to roughly 15 percent of the state’s economy. There is tremendous diversity in what we grow, with more than 220 different commodities produced under some of the best growing conditions you’ll ever find. That array of crops, livestock, and fisheries strengthens our agricultural economy, which strengthens all of Oregon. But our agriculture sector is more than numbers, it’s also about what makes this place so special – our open spaces, vistas, greenery, and sustainable natural resources. Those Oregonians who have chosen to raise our food and fiber deserve our gratitude and support, and I ask that all Oregonians join me in thanking them for their incredible contribution to our state.” Well, Governor, you’re welcome.

Teaching the girls how to de-bud hazelnut trees

Teaching the girls how to de-bud hazelnut trees

What does that mean in a nutshell? JOBS. The opportunity for Oregon’s Agriculture and it’s affect on the economy is exciting – if we can allow it to happen. Oregon agriculture has diversified into markets that are growing very fast… These markets offer the potential to revitalize an industry that is slowly being recognized as having an increasing role in Oregon economic future.* Agriculture… having an increasing role in Oregon’s economic future! More jobs, more revenue!

Okay, so we – Agriculture – we’re kind of a big deal. When we really look at it – Oregon’s Agriculture is NECESSARY for the continued strength of the state.

OR Ag important exports

Excerpt from Oregon Department of Agriculture presentation – click on to be linked to blog “Crisis on West Coast Ports”

But if we can’t get it to market, then what good is any of it?

We are on day 13 of a West Coast Port crisis. The hard-working (when they’re working) members of the ILWU at the West Coast Ports are stuck in a negotiation-tactic filled fight with the PMA (Pacific Maritime Association). Until this is resolved and a contract is finally filed, we are at the mercy of the Big Dogs. Our farm is fighting, our company is fighting, our straw-export industry is fighting, the Christmas Tree industry is fighting, the Washington Apple industry is fighting – we’re ALL fighting to stay alive, to continue business, to continue our ever-so-important relationships with our overseas buyers. Some of us might not survive this, and that is sickening.

Governor Kitzhaber, President Obama, members of Congress – you KNOW how important Agriculture is to this state, this country. Our history is filled with the stories of the American Farmer. At some point along the way, the American Farmer became two antithetical people – the adversary (see above in regards to “corporate farms” and “poisoning food”) but also the romanticized and commercialized icon of America.

God made a farmer_tractor

Think 2013 Dodge Ram’s Super Bowl commercial using Paul Harvey’s “So God made a Farmer.” If you haven’t watched the commercials, or read the entire speech – you should (See below for link). It’s amazing, and makes me tear up every time I read it and watch it – because it’s true. Farmers are special people choosing a lifestyle that’s not easy, bringing their family with them into the field, working long hours – all to get their product to market in order to survive another year.

Their product to market… Again, market. I’ve quoted this before, and I’ll quote it again:

“There is nothing that we produce in this country in agriculture, that cannot be sourced somewhere else in the world. We can grow the best in the world, but if we can’t deliver affordably and dependably, the customer will go somewhere else… and may never come back”.

This state, this country, will have a different landscape if we 1- cannot get our product to market and 2- farmers are regarded as anything but supporters of America and caretakers of the land.

“Opportunities and challenges” is perhaps a cliché, yet it is a phrase that certainly fits Oregon agriculture today. Agriculture holds great potential to contribute to the solution, as long as the entrepreneurs and policy makers who recognize agriculture’s role as an economic engine in the past continue to acknowledge its even greater potential for the future.*

We need the support of our neighbors, our state, and our government to continue to provide food, jobs and revenue for the good of us all.

Watch So God Made a Farmer Video: https://www.youtube.com/watch?v=AMpZ0TGjbWE

*http://ruralstudies.oregonstate.edu/sites/default/files/pub/pdf/OregonAgEconomyAnUpdate.pdf