Friday 5 December 08 - 13:27
 

Insight & Opinion

A case of déjà vu on West Coast labour woes

Port workers in 29 ports along the US West Coast (including approximately 20,000 in Los Angeles/ Long Beach) refused, at the start of July, to extend an earlier contract and are now negotiating with the Pacific Maritime Association on a new agreement while continuing to work.

Port Strategy: Hopes are that a lock-out on the scale of 2002's can be avoided
Hopes are that a lock-out on the scale of 2002's can be avoided

Observers have conjured up scenes eerily reminiscent of 2002, when slowdowns brought about a lockout of workers leading to legendary “supply chain disruptions” that ended only when President Bush invoked Federal Laws. This time around, the much softened economy (with trade flows through Southern California reduced compared with year earlier figures) has led to a more conciliatory negotiating style from both sides - who insist that they will keep talking. Hopefully, they are not just smiling for the cameras.

The 2002 West Coast dispute, where activity at the ports seized up for ten days, cost an estimated $15bn, as disruptions rippled through supply chains of big retailers and numerous other businesses. That very real 2002 incident provided inspiration, of sorts, for a Booz Allen war-game simulating a shutdown of US ports (after discovery of a fictional dirty bomb smuggled through). This imagined event came with a $58bn price tag on a country-wide lockdown of the ports.

Labour and management on the US West Coast are working in an environment without the opportunities to create efficient ports out of grassy fields. Yet, in their 2008 negotiations, and in work going forward, all players must be mindful of their role in improving their statistics. East Coast players, in North Carolina for example, are indeed launching greenfield facilities. The new APM Terminal in Virginia can be described similarly. These ports are indeed potential competitors for the US West Coast - where everyone must deal with the cards that have been dealt.

They say that “when presented with lemons, make some delicious lemonade”. Through attention to enhanced productivity, hopefully US West Coast labour and management can be sipping some of that sweet stuff, forcing generals in the next “war game” to search for a different muse.

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Hopes

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