Unfortunately: “I told you so.”

I started this blog in November 2014 because I needed an outlet and a platform to explain to the general public the possibility of economic tragedy on the west coast if the status quo was allowed to continue. I’ll be extremely brief: the west coast port slowdown was the result of a failure to collectively bargain between the ILWU (International Longshore and Warehouse Union) and the PMA (Pacific Maritime Association). Collective bargaining absolutely and categorically FAILED the United States. It failed the import/export business on the west coast especially. It failed American agriculture that relies on an efficient transportation system to get its superior goods to market. And in essence it failed the American economy. It’s failure is my reality.

One of the main theme’s of my advocacy on this issue is this, and stated in this blog post:

Oregon’s Agriculture is NECESSARY for the continued strength of the state. But if we can’t get it to market, then what good is any of it?

I would suggest the same for American agriculture. According to a Joint Economic Committee of the United States Congress report:

“The agricultural sector makes an important contribution to the U.S. economy, from promoting food and energy security to supporting jobs in communities across the country. Exports are critical to the success of U.S. agriculture, and population and income growth in developing countries ensures that this will continue to be the case in the decades to come. U.S. agricultural exporters are well positioned to capture a significant share of the growing world market for agricultural products, but some challenges remain. Taking actions to facilitate exports would help to strengthen the agricultural sector and promote overall economic growth.”

The AgTC (Agriculture Transportation Coalition) has been stating this for years:

“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”.

The theme here is obvious and overwhelmingly simple: for the sake of America’s economy, our ports need to work efficiently and productively.

And then this article drops today: Chinese Goods Bypass California.

 

Ports 1

Wall Street Journal: Chinese Goods Bypass California

Let me explain this in simple terms. Let’s say Fred Meyer’s is your favorite grocery store, but for some reason the traffic is horrible specifically in front of that store. One mile down the road, there is a Safeway with no traffic and has easy access. It’s a little harder to get there, but you start going to Safeway because it is efficient to do so. If Fred Meyer’s fixes the traffic problem, do you go back? Maybe. But also maybe do you stay with Safeway because you like the store and you’re now used to it? Possibly.

This is what the Wall Street Journal article speaks to. The west coast ports has a traffic problem. The east coast ports do not. China is choosing to spend a little more time and effort to ship into the east coast ports. And they might just find they are easier to work with. Will they make the move? Maybe. Will they ever come back? Maybe.

Anyone want to take this risk? I don’t. But it’s not up to me.

I’m going to be frank. The only person or entity that can take on the ILWU and the PMA is the President of the United States and the United States Government. I tend to be an optimist, but the fact that my hope is in the U.S. Government isn’t appealing and leaves me with a sense of hopelessness. I’m a believer in the Free Market. But, collective bargaining isn’t typically conducive to the free market. It’s ugly out there folks.

I could blather on for another couple hours about global trade routes and manufacturing in Asia moving east, ultimately making it easier to move product into the east coast ports of the U.S. Considering 2/3 of the population lives in the eastern U.S., this sounds like a good idea. What happens to our empty containers that we need to load for export on the west coast if all the containers are on the east coast? Even those not familiar with agriculture knows we can’t move our 250 different crops from Oregon to Kentucky. Also, I would suggest the southeastern states are more conducive to this little word: business. That is all for another discussion on another day.

My point: Let’s not give ship lines any more reason to bypass the west coast ports. I feel like I’ve said this too much lately, but: Wake Up America.


 

For more background information, visit my previous blogs on the West Coast Port Slowdown.

Why this affects you.

Day 29… and counting.

AgTC: Statement of the Agriculture Transportation Coalition

Port Crisis 101: history of, where we stand, and a little of my own opinion…

The battle continues… West Coast port crisis not over.

Port Crisis? Still. Not. Over.

1-Year Recap of the West Coast Port Crisis – the ship that sailed

1-Year Recap of the West Coast Port Crisis – the ship that sailed

At this time, one year ago, any truck delivering containers to a West Coast port knew something was up. Terminals were slow, truck lines were long, communication between terminals and trucking companies was confusing. As an exporter, our greatest fear of that time was coming to the forefront of our world: the contract between the ILWU and the PMA that had expired on June 30, 2014 and was still being negotiated “in faith” had come to a tipping point. Multiple times did both sides confirm cargo would continue moving during negotiations – see Press Releases here – when in fact, that ended up being untrue.

By day 5 of the “West Coast Port Crisis”, I already knew what was going on – and knew that the only answer to this problem lay high above one person, one industry, or one state government. See my synopsis on November 7, 2014 here. If you want more history on the crisis, I wrote many blog posts throughout the crisis at my blog: www.DaughterofaTrucker.com.

Where are we now?

Our export industry is struggling. The impact on every industry is different. For the industry I’m involved in, grass straw exports, because of last year’s crisis and exporters not being able to get their forage to market, we had an oversupply by the time our next crop came around. For the Christmas Tree industry, we’ll see in the next month whether they lost their customers from not being able to fulfill orders last year. Washington apples lost millions in sales – one person calling it the “worst year in her career”. Will they recover, and what business did they lose?

The problem is due to two factors: the apple crop is the state's largest on record, and labor disputes at the state's ports resulted in apples sitting for too long.

The problem for the loss in apples was due to two factors: the apple crop is the state’s largest on record, and the port dispute resulted in apples sitting for too long.

I asked a colleague who is involved in international trade for his perspective as an Oregonian living in Hong Kong, Shaun Harris. He shares the following:

Usually in Hong Kong, grocery stores have produce and food items from the US. When the port slowdown happened, suddenly you couldn’t get celery and lettuce from California for instance. You couldn’t get Almond milk or Tillamook cheese from Oregon. But soon enough, those spaces were filled with Australian and European goods. (Turns out the French make a pretty good cheddar cheese.) Go back into the store today and most of those items haven’t changed back to the US product. I’m sure you’ll see the same thing playing out all over the world.

On a professional side, we spent months apologizing to customers for lack of shipments, seeing Japan’s MAFF writing USDA a letter asking them to figure it out, then a deluge of shipments once they made it out of the gridlock. Soon after, everyone was fighting overstock and soon accumulating inventories on the US side caused market prices to erode. From which, they still haven’t recovered.

Oregon Christmas Trees which were so heavily promoted here in Hong Kong ended up being cancelled and customers who ordered them got their money back.

As you can see, this was not and is not a problem that has been fixed. Just because the contract was finally “tentatively signed” in February 2015 and later ratified, the long term ramifications are very real and aren’t going away. How many U.S. companies lost customers and/or business that may or may not get them back? What was the cost to these companies? How much of the economy was hurt in the US because of the monopoly the PMA and ILWU has over all of us? What can be done to ensure this does not happen again?

Liberty Street Economics blogThese questions are impossible to answer. It’s possible the GDP of the United States suffered for the first quarter of 2015 because of the West Coast Port Crisis – just the fact it is even in question should be a wake up call for Congress, for our President, for the American people. Can you even believe it? The crisis was so bad it affected the Gross Domestic Product of the United States of America. It is baffling our administration allowed this to go on for so long.

Any help on the horizon?

Maybe. The Transportation Bill is currently being debated in Congress. Amendments to this bill include asking for port metrics to be gathered, as well as asking the GAO (Government Accountability Office) to study the effects of the port crisis are all being looked at. In addition, Congressman Newhouse (WA) will be introducing the ECONOMICS Act (Ensuring Continued Operations and No Other Major Incidents, Closures, or Slowdowns Act);  this puts in place specific “triggers,” so that when certain economic impacts surrounding a dispute occur, a Board of Inquiry must be convened, and the Board is required to report to the President and the public to recommend whether there should be a judicial injunction. There are other bills that have already failed, and I believe there are more still to come.

Can Congress fix this problem? Absolutely not, nor would I want them to. But, in the current monopoly of the PMA and the ILWU, we will need the US Government to have the information in the future if this happens again. Changing law in order to have this information for future use is imperative. I applaud specifically Congressman Reichert and Congressman Newhouse in Washington, as well as Congressman Schrader and Senator Wyden in Oregon for listening to their constituents and being instrumental in ending last year’s crisis as well as moving forward to help US trade on the West Coast.

Any other ideas?

In the words of my uncle Allan: Move to Texas. More importantly and seriously, please stay involved, stay informed, and continue to monitor the life around you. I love our state of Oregon, I love the west coast (West Coast, best coast!), and I love the United States. Unfortunately that doesn’t make it perfect. Thank you for reading.

ENGAGE in OREGON’s future – won’t you?

I was asked to be a part of an exciting new organization: Engage Oregon. Its two main goals, in my opinion, are paramount to Oregon’s success in all areas.

GOALS:

  • Business is the solution, not the problem.
  • Government needs to be held accountable for spending, especially when it comes to dollars for education.

Our mission

To engage and activate Oregonians who care about growing and expanding job opportunities here in Oregon.

How can you disagree with that?

This past year I’ve been outspoken on behalf of Oregon agriculture, export, and trucking industries when it came to the mass confusion and incredible economical loss we encountered during the West Coast Port Crisis. Many farmers, truckers, mechanics, assembly line workers, equipment operators, office staff, etc… all saw extreme scenarios that put their jobs and their livelihoods at risk this past year.

I was asked to write a short column on my thoughts about this, and this was sent out to Engage Oregon’s supporters. I’d like to share here:

engage-oregon-logo

Dear Engage Oregon supporter,

Growing up in a farming family, I started driving tractor at age 12.  As I grew, so did my family’s businesses. Boshart Trucking, BOSSCO Trading, PressCo and SJB Farms, employ nearly 50 Oregonians, and provide Oregon-grown food, grass seed and forage to customers all over the world.  

Oregon is in a unique geographical position in both the nation and the world to capitalize on international trade, yet we are in trouble.

Agriculture is important to us as Oregonians and as Americans. From the words of our former governor: “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% 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.”

What does that mean in a nutshell? JOBS. The opportunity for Oregon agriculture and its effect on the economy is exciting – if we allow it to happen. Oregon agriculture has diversified into both domestic and global markets that are growing and have the capacity to grow more!

If we can’t get Oregon agricultural products to market, then the opportunity for economic growth has been lost. From the words of the Agriculture Transportation Coalition (AgTC): “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.”

The current status of Oregon’s exports is discouraging. We no longer have container service at the Port of Portland. 99% of the Port of Portland’s container business left the state in February when Hanjin’s last vessel, the Copenhagen, pulled out of Portland after a 22-day moorage in February and Hapag Lloyd followed suit by not calling on the Port. This business has not been replaced. This has left Oregon’s exporters scrambling to find other means to get their product to the international market – primarily via Seattle and Tacoma.

For the sake of our economy, this has to change. Oregon’s agriculture – and those that rely on it for food, feed, shelter, and jobs – need every chance to be competitive. Oregon’s port working productively is one opportunity to accomplish this.

Thanks for staying in touch with Engage Oregon. Together we can turn the tide.

https://www.facebook.com/EngageOregon       https://twitter.com/engageoregon

Shelly Boshart Davis, Oregonian

Being engaged as an Oregonian – regardless of the side of the aisle you identify with – is something I think we should all aspire to.

If you’d like to join me in getting involved in this new organization, please do! Simply go to www.engageoregon.org, and sign up on the home page. Click through the website to learn more. Whatever you do, however you vote, this is something we can all proudly be a part of.

Port Crisis 101: history of, where we stand, and a little of my own opinion…

Over the past few weeks, the port crisis has been on the news, on the radio, and in the newspaper. Those of us that have been aware of this since last May are pretty versed on what’s going on. Or if you happen to be a friend of mine, then you I’m sure have been briefed on the subject. 🙂 Sorry not sorry. There was a recent article in the Oregonian on the background of the Port of Portland – a fantastic article showcasing the history of what has brought us to this point at the port. Very sad, very true. I had a local farmer in my office asking me, “Is it really that bad?” Yes, it’s really that bad.

That article really showcased the Port of Portland, but if you want to learn more about the crisis ensuing at all West Coast ports, let me take a shot at it… (With help from the AgTC)

THE PLAYERS

  1. Port Authority – a public government entity which owns the land. It is the landlord. In California, Ports are a division of the local City government – so the Ports of LA, Long Beach and Oakland are controlled by the Mayors. Port of Portland is an entity of the State of Oregon. Seattle and Tacoma are independent governments (and their marine departments are merging).
  2. Marine Terminal Operator – is the tenant. It is a private company which leases a piece of the Port Authority’s land, typically for 5 to 50 year terms. (Note the Port of Portland’s terminal operated signed a 25 year lease. I believe they are on year 3 of the lease.) Millions of dollars are invested in cranes and other equipment, some funded by the landlord Port, some by the tenant Marine Terminal Operator. The Terminal Operator hires longshoremen (who are represented by the ILWU) to operate the equipment and load and unload the ships that dock at the terminal, but also working in the container yard to load and unload containers on and off the trucks. If a terminal has an on-dock rail yard, containers are loaded on and off the rail cars by longshoremen labor.   There are three basic kinds of terminals:
    • “Bulk” handle grain, soybean, oil — in huge tanks or elevators, and pour the product into massive compartments of ships. These bulk terminals are operating under a separate contract with the ILWU, and there is currently no dispute and no disruption to operations.
    • The other primary terminal, is a “container terminal” where ships are loaded/unloaded with those steel boxes, generally 40 foot x 8 x 8 (called a Forty Foot Equivalent Unit or FEU) or 20 foot x 8 x 8 (TEU). There are dozens of container terminals on the West Coast, ranging from one container terminal at Port of Portland, to eight at Port of LA and six at Port of Long Beach. The terminal operator, hires the labor (longshoremen) to operate the terminals. The current labor dispute centers on these container terminals. The operators of these container terminals are members of the Pacific Maritime Association (PMA), which is representing them in negotiations with the International Longshore and Warehouse Union (ILWU, see below) on the marine terminal labor contract.
    • Also, there are “break-bulk terminals.” Some cargo does not move in containers, but are stowed loosely in the hold of a ship. For example, rolls of newsprint, or coils of steel, or palletized fruit. The current ILWU –PMA dispute has largely (but not completely) spared these terminals.
  3. Steamship Lines (actually, none operate with steam power – it is petroleum fuel), are also known as “ocean carriers”, or just “carriers”. There are about 20 major ocean carriers carrying US international trade, import and export, to and from West Coast terminals. All are private companies, all are foreign companies, headquartered in Asia, Europe and the Mid-East. None are US owned companies. The steamship lines enter into long term contracts with container terminal operators, often agreeing to share costs of container cranes and other infrastructure. They typically pay the terminal operator a fee per container loaded on the ship, or unloaded, under various arrangements.
  4. Labor. The International Longshore and Warehouseman’s Union (ILWU) represents 100% of the labor force at the US west coast marine container terminals. These include all levels of labor, including skilled crane operators, operators of equipment who stack containers, lift containers on and off of the trucks, clerks who check others’ work, those who run the gates at which trucks enter and exit the terminals checking documentation, plug and unplug refrigeration units on containers, etc.
  5. Pacific Maritime Association (PMA). This is the organization comprised of the West Coast terminal operators and steamship lines that negotiates the labor contract with the ILWU. All compensation, wages, benefits, work rules, vacation, and dispute resolution procedures, are covered by the PMA-ILWU contract.
  6. The Hiring Hall. This is an historical labor hiring mechanism, today unique to longshore labor, passionately defended by the ILWU. Under the hiring hall mechanism, no regular team of longshoremen (crane operator, checkers, mobile equipment operators, etc.) show up at the same terminal each day, familiar with the requirements of the job, and with each other. Instead, the terminal operator, each morning, calls the ILWU Hiring Hall, and puts in an order for a crew, or number or workers. The ILWU dispatcher then sends out whatever group he assembles. That is the crew that works that terminal that day – rarely the same combination of individuals, with varying degrees of experience, work ethic and familiarity with the equipment. It obviously impacts the productivity of terminal operations. In some ports, such as Charleston and Savannah, the terminal workers are organized as regular crews, working together – as in virtually every warehouse or manufacturing enterprise, or as is the case in Ports around the world. The lift rate on and off the ships at Charleston and Savannah is approximately 42 or 44 containers an hour per crane (similar to Europe). On the US West Coast, it is typically 27 to 28 containers/hour. In my opinion and from running crews and business myself, this is a very strange and seemingly extremely inefficient and unproductive way to do things. I would like the chance to understand the reasoning behind this mechanism the ILWU still uses. I wonder if there is any reasoning behind it or if it’s simply “how it’s always been done.”
  7. Federal Mediator. Ideally, the PMA and ILWU can and do negotiate each contract (every 3 or 6 years) on their own. However, when the two parties cannot reach agreement, they can request assignment of a mediator by the Federal Mediation and Conciliation Service. Both parties have to agree to use the mediator, who is engaged only for as long as both parties want him/her to assist in the negotiations. The mediator has played a central role in helping the ILWU and PMA, as well as the East Coast longshore union and employers, resolve contract disputes on several occasions in recent years. According to a Journal of Commerce article, for contracts covering more than 1,000 workers, the success rate was 76.6 percent in Fiscal 2013.

THE ISSUES

  1. ILWU- PMA Contract. The contract contains all aspects of the working relationship between longshore labor and their employers, the PMA. Pay, benefits, work rules, arbitration mechanism to resolve disputes as they arise. The contract expired June 30, 2014. With exception of a brief extension, the ILWU and PMA have been operating without a contract and thus any dispute resolution mechanism.  Negotiations have continued on and off, on the following issues (note these are “believed” issues as negotiations are tight-lipped except for the very slanted press releases coming from one of the parties):
    • Automation: Automation means fewer longshore jobs. To protect their jobs, ILWU has successfully limited ability of US west coast terminal operators to install automated cranes, readers and other equipment that are commonly used throughout the world. ILWU seeks to limit the introduction of automation, and protect jurisdiction.
    • Jurisdiction: To the extent automated machinery is introduced, ILWU wants to assure that ILWU members (as opposed to Machinists Union or International Brotherhood of Electrical Workers) have the work.
    • Affordable Care Act (ObamaCare) imposes an excise tax on the “Cadillac” health care plans, to raise money to pay for health coverage for those who can’t afford it. As the ILWU health benefits are among the most generous in the world, they are subject to this excise tax. The ILWU members do not wish to pay the excise tax, as this would make their benefits no longer 100% free. PMA says the terminal operators cannot afford to pay the $150 million annual cumulative excise tax. While no public statement has been released by the PMA and ILWU, it appears that they have agreed to deal with this by “kicking the can down the road”: since the excise tax doesn’t kick in till 2018, they may agree to a 3 year contract, and leave this excise tax issue for the next contract negotiations.
    • The ILWU wants the right to unilaterally fire a local arbitrator. Local arbitrators are appointed jointly by the ILWU and PMA, with a local arbitrator serving in each of the major port ranges on the West Coast. When the coast wide contract is in force, and a dispute arises between the employer and the ILWU local, an arbitrator is called in to gather testimony and render a decision. In most instances, the local arbitrator can prevent what is often a minor disagreement from shutting down a marine terminal for an entire day, or longer. In the worst case scenario, as is occurring right now, the absence of the arbitration process can allow work slowdowns to continue endlessly. Does it make any sense to any of you that either party should be allowed to fire an arbitrator? Wouldn’t that give any party simply too much power? The right to fire the exact individual that is supposed to either rule in favor or against you? I would suggest that we would all be in agreement that this is simply too much power for any one side.
    • Chassis: When the chassis were under control of the ocean carriers, the ILWU did some of the chassis repair work. Now that the carriers are divesting themselves of the chassis, turning ownership and management to independent leasing and trucking companies, who will have jurisdiction over chassis repair work? The independent leasing companies and truckers are not a part of the PMA and are therefore not a part of the current negotiation between the ILWU and PMA. INSERTING MY OPINION HERE: According to the ILWU, and quoted from a source that I need to remain private (therefore not verifiable), there was a letter sent to Members of Congress urging them not to sign onto a previous Congressional letter.  In that letter, it is quoted regarding the Chassis M&R (maintenance and repair): “It’s an important issue in terms of preserving and protecting the jobs of hundreds of ILWU mechanics but more importantly we want chassis on the road that are maintained and do not endanger the lives of the driving public.” May I break this statement down? The ports no longer own the chassis (explained below). This got phased out over the course of the last year or so. Private leasing companies, or like in the case of our company, individual companies own their own chassis. These companies are responsible for the maintenance and repair of the chassis that they OWN. The Federal Motor Carrier agency and Dept of Transportation set incredibly strict guidelines that we follow to ensure safety on the road. Between our 2 truck shops, we have certified mechanics performing Annual Inspections on these and every other piece of equipment being used on the road. We also have pre-trip inspections performed by truck drivers every single day these are being used. For the ILWU to want jurisdiction over and responsibility of this task is ludicrous. The lives of the driving public have absolutely nothing to do with the ILWU. To put it bluntly, it is not the ILWU’s job or responsibility to maintain safety on the roads. If a chassis that they inspected were in an accident, would the ILWU take responsibility? I think not.
  2. Port Operations Disruption. Since May 2013, all West Coast terminals have suffered job actions by the various ILWU Locals that have resulted in closure of terminals, ranging from several hours to several days. The pace of these labor actions accelerated in sporadic and unpredictable manner during September and October, 2014, and became a daily unpredictable occurrence at various terminals up and down the coast, since November 2014. Job actions include walking off the job, or not reporting for work, or the Hiring Hall sending less experienced labor. Sometimes the work is so slow, the terminal operator shuts down the terminal. ILWU claims PMA (terminal operators) are making the situation worse, by refusing to hire 2nd and 3rd shifts (at hefty overtime pay scale); PMA says that the longshoremen are working so slow as to force hiring 2nd and 3rd shifts, and they aren’t going to be “played”. The ILWU deny they are working slow.
  3. Other Factors Contributing to Port Congestion. As in any industry, there is ongoing change in ocean carrier and port operations. With effort by Ports, terminal operators, and labor working together constructively to meet challenges, it is possible to work through these. But when labor doesn’t show up to work, or takes steps to exacerbate the challenges, congestion is the predictable result.
    • Mega Ships, now double the size of the traditional container ships, depositing hundreds of containers at a time on the terminal. This taxes the available terminal space, increases the need for velocity in moving containers off the ships, onto the trucks or rail, and out the gates.
    • Alliances. The steamship lines, taking advantage of the new mega ships, are now combining their cargo, so as to have larger volume deliveries of containers, but fewer ship calls. More containers, delivered at once, stresses capacity of the terminal operator to move the containers through the gates.
    • Chassis—(the trailer on which the ocean container is placed and then hauled out the gates). Ocean carriers have traditionally, in the US, owned and maintained the chassis. The carriers are discontinuing this. Chassis are now the responsibility of truckers, shippers and others. During this transition there has been confusion and a shortage of chassis. To solve the problem, some shippers are buying and maintaining their own chassis. The Port of Long Beach is acquiring 3,000 chassis to have available for shippers through that Port. Other solutions will be implemented over the coming months/years. In the meantime, like the mega-ships, all parties need to work constructively to try to make the best of the situation.

WHERE ARE WE NOW?

The finger-pointing between the PMA and the ILWU is intense; and exporters and importers are not being spared the increasing damages, losses, missed delivery deadlines, unhappy overseas customers, waiting trucks, rejected cargo, and layoffs.

The long term impacts are becoming evident: for exporters – permanent loss of foreign customers who are looking for food, farm and fiber sources in other countries. For importers – hearing accelerating plans to permanently revise supply chain, reducing dependence on US West Coast ports, increasing shipments via Canadian and all-water (Panama and Suez) to the East/Gulf Coast ports.

The future impact to all West Coast states is in flux. How will the rest of the world react to the unreliability of our ports? Are our international customers looking for another source for their feed, food and fiber? Will other industries (airplane and car parts, shoes, retailers, etc…) move their warehouses and distribution sites towards the East Coast and Gulf Coast to be closer to more a more reliable port system? They already are. There’s chatter out there of the East Coast terminals and ILA (International Longshore Association) asking for that business. If this happens, then where will we get empty containers? How much more will it cost to ship off the West Coast and will we be competitive in the global market? How much will the landscape of Oregon and America change? All of these questions remain to be answered. One thing is for certain: the longer these disruptions continue, the more at risk we are.

Things are moving fast these days. On Thursday (February 12) morning, 359 Oregon companies, farms and associations wrote a letter to the Oregon Congressional Delegation asking for intervention in the West Coast Port Crisis. Also on Thursday, many Congresspeople hosted a Press Conference on this subject. (See Congressman Kurt Schrader’s comments here). By Friday morning, all 5 US House Members from Oregon sent a letter to the President urging his active and immediate engagement, including using statutory authorities accorded to the Chief Executive as necessary. Friday afternoon, US Senators Jeff Merkley and Ron Wyden wrote a letter to the ILWU/PMA strongly urging both parties to immediately resume port operations at full capacity while the final issues are negotiated. Finally, Friday afternoon, President Obama announces he will send his Secretary of Labor to the negotiation table. This doesn’t necessarily mean a signed contract is immediately imminent, but the last week showed more media and political involvement then we’ve seen in the past 9 months combined. I’m hoping it’s a sign that we are moving in the right direction.

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

From the White House

“We alerted them that agriculture and forest products, America’s largest and most important export, are in serious peril.”

I’m shocked that this information isn’t on the news – and other than those I’ve talked to about – or maybe some that have read my blog or Facebook posts – the general public has no idea what’s going on. And according to this update, the National Economic Council and the Department of Commerce didn’t know either. I’ve pasted the update from our Executive Director, Peter Friedmann, after he met with some White House leadership. (See end of blog)

Why is this? I’m trying to figure out why the general public doesn’t know or understand. Do I dare believe that the ILWU is so powerful that the media doesn’t dare tick them off? If you want to be shocked about something, read this: http://www.pmanet.org/the-ilwu-workforce. (I’ll be blogging on this subject in the future). In a nutshell: Full-time workers earn an average of $147,000 annually in wages, along with a non-wage benefits package costing more than $82,000 per active worker per year. You better believe they don’t want this information out when they are crying about fair compensation and being blue collar middle-class families. They also don’t want it to get out that they are trying to negotiate to NOT pay the taxes on their Cadillac health care plans. And of course they don’t want automation – to keep our ports competitive – because they want to keep these high paying jobs.

I feel like I’m beginning to sound like a doomsday-er. I truly don’t intend to! Only two things can happen at this point: the PMA can cave into the demands of the ILWU so that they get back to work and stop their negotiating tactics of port slow downs – this option makes it harder to compete on an international level… Or the situation hurts the economy so badly that our US Congress and/or President Obama needs to step in. It’s a lose-lose situation.

I realize that I need to write some background to the labor/contract dispute. I will try to do that soon. Hope this is enough to start getting the general public some knowledge into their economic limbo. I believe that the newspapers and TV will start covering this by the end of the week if this does not begin to improve. Until then, this is all I’ve got to help – one voice.

AgTC: White House Meeting Update

November 12, 2014

The AgTC and other industry groups met with White House leadership of the Domestic Policy Council, National Economic Council, and Department of Commerce to discuss the crippling port disruption on the West Coast. We alerted them that agriculture and forest products, America’s largest and most important export, are in serious peril.

There were a lot of aspects that the White House was completely unaware of– they didn’t know how much cargo is being left at the docks or is not able to be moved at all. We were very concerned at how little the White House knew about the situation at the West Coast ports and the impact on the nation’s economy. We made sure that they know now.

The White House said they were monitoring the situation, and we strongly emphasized that monitoring is insufficient. We urged the Administration to take firm action such as bringing in a federal mediator, as was the case in previous instances of labor-management disputes. We told them that we are weighing in with our Congressional delegations and that they will be hearing from Members of Congress.

In the meantime, we will continue to reach out to the press, because we believe the White House will respond immediately to the glare that is cast upon the White House by the press inquiries. We need to stimulate more of those press inquiries, and that is what we will continue to do.

Hi my name’s Shelly, and I’m an advocate.

I really wish that my second blog post could have dealt with sunshine and lollipops – maybe some cute kid pictures, some “Hello from the farm Friday” pictures.

Unfortunately, I’m diving head-on into something a little bigger than lollipops…  Oregon’s and America’s economy. Yikes, I know.

Port of Seattle

This is the line of trucks on Wednesday trying to get into the Port of Seattle. Port of Tacoma looks like this too… We are on DAY 5 of not being able to turn in containers into Port of Tacoma. To make a terribly complicated and long story short… we are one step away from the West Coast Ports – including Los Angeles and Long Beach – being completely shut down. 65% of America’s imports come through the Ports of LA and LB. The threat to America’s economy is estimated at $2 BILLION each DAY there is a shut down. Immediate action is necessary at the federal government level. Letters from the largest organizations and businesses in the country are urging President Obama to do something!

So, what can I do? It seems like nothing. But I’m constantly reminded that one person CAN do something – and so I am. I’m spending way too much time of my working day writing my state congress men and women, and our newly re-elected Governor Kitzhaber. I’ve written to Oregon’s representation in the US Congress. I’ve contacted Oregon Trucking Association. Our export groups are writing letters and contacting Congress. It takes hours to do this – hours I need to spend working, to minimizing costs to our business, to help with dispatching trucks and making decisions on what to do in the midst of this crisis, all to try and keep our customer’s schedules on time as much as possible. It currently is impossible to do so – there are millions of dollars of product being imported and exported that are currently sitting on docks on all the West Coast Ports, simply not moving.

My guess is that most of the public doesn’t care – and not in a negative sense! They just don’t know! But, every time something happens in the world of transportation, it will affect the consumer – typically in either higher costs, or product not getting to market. Think of it in terms of your favorite local coffee shop… those coffee beans are sitting in containers in port, or maybe not unloaded off the ship in Seattle. And all of a sudden the costs of those containers sitting at port adds up, and someone has to pay for it! Guess who ends up paying? That’s right – you and I.

And I care deeply for all of the reasons above, but what I most care about is Oregon and it’s wonderful AGRICULTURE. And guess what happens if this problem doesn’t eventually get fixed and fixed quickly… we lose our international customers. Consider the wise statement upon which the Agriculture Transportation Coalition was organized:

“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”.

What happens if our customers around the world choose their Agricultural products elsewhere? This home that we call Oregon begins looking a lot different. We as a state can produce the finest agricultural products available – but if we can’t get those products to market, then we all suffer, including our next generation. Here’s my next generation – and this way I can tone this blog down with cute kids picture!

My girls

Here’s hoping that tomorrow is truly a new day for us!