After months without a labor contract, the union representing West Coast dockworkers and the Pacific Maritime Association reached a tentative five-year agreement on Feb. 20.
After months of inaction, contract talks were spurred to finality with the assistance of U.S. Labor Secretary Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh.
The tentative agreement must still be ratified by both sides. A union vote has not been scheduled, but could take about 60 days to happen, according to PMA Spokesman Wade Gates.
Meanwhile, the Port of Oakland is estimating it could take six to eight weeks for the backlog of freight and commodities to be cleared and for ports to be running at full productivity.
“This is obviously good news,” said Barry Bedwell, president of the California Fresh Fruit Association, a Fresno-based trade organization.
For Bedwell the news means the likelihood that stone fruit harvest, slated to take place around the first of May, will not be hampered by the work slowdown that plagued West Coast ports since about November.
The work slowdown began in early November, according to the PMA. Starting Nov. 3, 2014 the International Longshore and Warehouse Union (ILWU) suddenly began refusing to dispatch qualified crane operators at the Port of Long Beach.
In early October the seven-day moving average of qualified crane operators at Long Beach was about 120 for all daily shifts. That number quickly shrunk below 100 in early November and later in November fell to about 30. By January that number was down to less than 10 for all shifts.
According to a PMA statement, an area arbitrator working with the PMA and ILWU found on Feb. 22 that the Local 10 union at the Port of Oakland was guilty of an illegal work stoppage, resulting in port operations being shut down during the Feb. 22 day shift.
That action could bring a grievance and arbitration process and possible court action, Gates said.
News releases published on the websites for the ports of Oakland and Long Beach indicated that marine terminals at both locations were open on Feb. 23 with vessels being loaded and unloaded by union dockworkers.
Oakland was reporting on Feb. 23 that there was still a shortage of experienced crane operators, leading to continued slow operations there. Port status the morning of Feb. 23 indicated that 13 vessels were at berth and 16 were awaiting berth for unloading and loading operations.
While the ports move product in and out of the United State, perhaps none were as heavily impacted as fresh California commodities destined for Asian markets.
Nut shippers began to see containers of their product “rolled” from before Christmas to dates after Jan. 1 because of the work slowdowns.
California fresh citrus was heavily impacted, according to California Citrus Mutual President Joel Nelsen.
Fresh citrus shipments – primarily Navel oranges – were running 50 percent below historical season-to-date numbers as of mid-February, according to Dusty Ference, grower relations director for CCM.
The slow movement of fruit is likely to blame for an early-February decision by Chinese officials to reject all citrus exports from Tulare County, Calif.
California citrus officials were informed in early February that China would refuse further shipments of fresh citrus from Tulare County because of brown rot, an issue which brought shipments of fresh citrus from California to China to a halt in 2013 as China and the United States hammered out a trade agreement to address the issue.
Nelsen disagrees with the brown rot diagnosis, suggesting instead that it is simply the decay related to the time it took to get fruit from California packing houses to Chinese customers.
According to Nelsen, the time frame to ship fresh citrus from the packing house to Asia is generally 21 days, but the ports slowdown greatly extended that time, allowing the fruit to decay before reaching its destination.
California exports about $300 million worth of Navels each year. Current estimates suggest the California citrus industry has lost well over $100 million in lost sales this year because of the ports slowdown.
The farm gate value of Navel and Valencia oranges in Tulare County in 2013 was more than $864.6 million, according to the Tulare County Department of Agriculture. Tulare County exports over 38 percent of its oranges.
Future opportunities lost?
Current sales aside, Nelsen said lost marketing opportunities – the ability to build marketing relationships and keep them – could also suffer because of the union’s actions.
Nelsen and others say that the lost sales opportunities of U.S. agricultural goods could have long-term impacts in global markets that are looking for stable supplies of food products.
Jim Zion, managing partner with Meridian Nut Growers, a company that markets dried fruits and nuts from its base in Clovis, Calif., said he has had to send product by rail to the East Coast just to get it on a ship for export. Only the West Coast of the United States is impacted by the union work slowdown.
“This is a great concern of mine because 65-70 percent of our pistachios are going overseas,” Zion said.
California almonds are also faring poorly as nuts sit in containers not going anywhere.
According to the Almond Board of California, 70 percent of California’s almond crop is exported; most of that crop leaves from the Port of Oakland.
“The implications of the current situation are detrimental and twofold: the immediate economic impacts in the form of delayed/canceled orders and congestion and other charges, as well as the potential long-term loss in market share,” said an ABC report issued before the tentative agreement between the ports and dockworkers was reached.
One northern California walnut processor has its warehouses full of product and workers at home on furlough because of the labor union’s slowdown. Omega Walnut in Orland recently sent over 40 people home, according to Plant Manager Jake Cecil.
“These are people who aren’t getting paid while the union workers still receive their pay and benefits,” Cecil said. “That’s simply not fair.”
Governors from California, Oregon and Washington stepped into the matter in early February, calling on both sides to reach a quick agreement and avoid “jeopardizing thousands of jobs,” according to California Governor Edmund G. Brown, Jr.
Oregon Gov. Kate Brown and Washington Gov. Jay Inslee issued statements within days of the announced tentative agreement, calling on the two sides to come together on a contract.
Oregon took a particularly heavy hit recently as Hanjin, one of the world’s 10-largest container carriers, announced it would be pulling out of the Port of Portland effective March 9. Hanjin was Portland’s largest container carrier, reportedly handled nearly 80 percent of the container volume at the port.
While pleased with the tentative agreement and decision by union dockworkers to return to work, Bedwell says Congress and the President still need to address the dockworker unions’ ability to strike or purposefully slow work operations because of the negative impacts such actions have on the national economy.
“This is so damaging to various sectors of the economy that it needs to be prevented,” said Bedwell. “We need to make sure that things like this cannot happen again in this country.”
Some in agriculture are beginning to call on Congress to place the dockworkers union under existing federal provisions that prohibit these kinds of work slowdowns when they endanger international trade and large segments of the national economy.