Even if President Obama can end the labor dispute that
has crippled shipping at West Coast ports, peace will come too late for many
big and small Oregon businesses.
Obama has sent U.S. Labor Secretary Thomas Perez to
negotiate a settlement between the International Longshore and Warehouse Union
and the Pacific Maritime Association, a coalition of 29 West Coast terminal
operators, but the intervention comes too late to prevent Hanjin Shipping from
stopping service to the Port of Portland on March 9.
In the unlikely event the two sides agree to a new
contract in the near future, the local ILWU chapter also is fighting with
International Container Terminal Services Inc., a Philippines-based company
that has a long-term lease with the port to operate Terminal 6. That dispute
has led to work slowdowns that caused Hanjin to announce its departure.
The loss of Hanjin will be devastating for David Kahl,
who said he may be forced to move his small furniture business out of Portland.
Kahl owns Ergo Depot, which sells ergonomic office furniture online and through
a showroom in Southeast Portland.
The company gets most of its height-adjustable desks and
chairs from China. After March 9, Hanjin will deliver the shipments to Seattle
— the closest port it will still serve — and Kahn will have to pay extra to
have them delivered to Portland.
“My shipping costs will increase from $3,100 to $4,000 a
container. I just can’t remain economically competitive if my shipping costs
increase about 30 percent,” Kahl said.
Ironically, Kahl moved to Portland after falling in love
with the city just a few years ago. He moved his company’s distribution center
from New Orleans to Swan Island a short time later. Now he is considering
moving the entire business back to New Orleans or another location where
shipping costs are lower — eliminating 20 local jobs.
“I can’t believe nobody can stop what’s happening at the
port,” Kahl said.
Bigger businesses also will be hurt by Hanjin’s departure
because it handles 80 percent of the shipments at Terminal 6, Oregon’s only
deep-water port. The state’s $5.4 billion agricultural industrial will be
especially affected because 40 percent of its products are exported throughout
the world, and most of it flows through the Portland port.
But the situation already is so critical that a
bipartisan group of West Coast U.S. representatives has called on Obama to
invoke the federal Taft-Hartley Act, which gives him the power to force an end
to the contract dispute. It was used by President Bush in 2002 to stop the
lockout of longshore workers by West Coast port operators.
“It is time for the Pacific Maritime Association and the
ILWU to recognize that the consequences of their actions reverberate far beyond
their own personal concerns,” said Oregon U.S. Rep. Kurt Schrader, who is part
of the coalition. “They need to immediately conclude their negotiations before
they do any further harm to the economy.”
Oregon U.S. Sens. Ron Wyden and Jeff Merkley also wrote
to the heads of the ILWU and PMA on Friday, calling on them to settle their
differences. They sent a similar letter two months ago but did not get a reply
from either side.
Plenty of blame
Port officials say they did everything possible to
prevent Hanjin from leaving, including rebates, incentives and subsidies
totaling more than $11 million, all from the company’s rent payments. They also
have held face-to-face meetings with Hanjin officials in South Korea and New
Jersey, conducted an independent review of operations at Terminal 6, and
recently made a change to the crane maintenance service provider.
“At this point, Hanjin’s decision to withdraw service
from Portland has been made. While we would never say never, it is highly
unlikely that any eleventh-hour actions would prevent their withdrawal at this
point,” said port spokesman Josh Thomas, who estimates it could take up to three
years to find a replacement with the same trans-Pacific capabilities.
The ILWU and ICTSI
publicly blame each other for Hanjin’s departure.
Jennifer Sargent, a local ILWU spokeswoman, says ICTSI is
anti-union and only concerned about its bottom line.
“Hanjin’s stated departure from Portland rests solely on
ICTSI’s inherent refusal and failure to nurture customer relations. ICTSI’s
only interest is to leverage its regional monopoly for maximum short term and
unit company profit. Its customers are secondary. ICTSI’s disrespect for its
customers’ interests parallels labor relations with its work force. Their
approach has been ‘this is what ICTSI wants. Take it or leave it,’” Sargent
said.
But ICTSI says the
union is solely to blame.
“Hanjin’s decision to leave the Port of Portland on March
9, 2015, due to the sustained and deliberate actions of ILWU workers is a
significant blow to the regional economy and will cause substantial disruption
to many local businesses, workers and consumers,” ICTSI said in a statement
issued after Hanjin’s announcement.
Despite the dueling accusations, when independent third
parties have been asked to assess blame, they have sided with ICTSI. Two
National Labor Relations Board judges have ruled the ILWU has violated federal
labor laws at the port. And U.S. District Judge Michael Simon has issued an
injunction against continuation of ILWU’s conduct. Simon also found the union
in contempt of court on Dec. 16, 2014.
Boost or bust?
Hanjin’s departure threatens a long-range plan to boost
the state’s economy by increasing the export of goods and services. The Greater
Portland Export Initiative calls for increasing the value of the state’s
exports from $33 billion in 2012 to $42 billion within a few years.
The plan was prepared by a private-public partnership
that includes Greater Portland Inc., Business Oregon, the Portland Development
Commission, the City of Hillsboro and the U.S. Export Assistance Center in
Portland. Export-related jobs are considered critical to economic growth
because they pay higher-than-average wages.
“GPI is concerned about the impact that the loss of the
Hanjin container service will have for our region’s small and medium-size
exporters — especially given that these firms have less ability to withstand
the additional costs of shipping to and from alternative container ports,” said
Sheila Muckridge, the organization’s vice president of marketing and
communications.
Hanjin’s departure will not affect all port operations.
According to Thomas, the port has four marine terminals that also handle
automobiles, grain, minerals, steel, project cargo and bulk liquids, and they
will not be impacted by the decision.
Thomas said that when Hanjin leaves, port officials will
work with all parties on short-term plans to reroute cargo and long-term plans
to recruit another trans-Pacific shipper. Although two other shippers serve
Terminal 6 — Hapag-Lloyd and Westwood Shipping — neither handle the same volume
of shipments as Hanjin. It averaged 1,500 containers a week, provided an
estimated 657 direct jobs, paid $33 million in annual personal wages, supported
$83 million in business revenue, and generated $12 million in state and local
taxes.
“Hundreds of businesses use Terminal 6 to get their goods
to and from international markets, including a multitude of inland agricultural
exporters. Over 88 percent of Oregon exporters are small and medium-size
businesses. When Portland isn’t an option, companies must use other ports
outside of Oregon, often at a steep premium,” Thomas said.
Source: Portland
Tribune
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