The long delay in achieving a West Coast labor contract could result in a substantial long-term loss of West Coast port business and especially hard hit will be the ports of Seattle and Tacoma, according to Edward DeNike, president, SSA Containers.
DeNike was speaking to the Agriculture Transportation Coalition annual meeting in Tacoma Washington on June 15th.
DeNike said that he expected the contract between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) to be ratified but both sides came away bloodied from the outcome "I would feel that it's almost a hundred percent chance that both the rank and file and the employers will agree to this contract. It was a hard contract." he said adding that "I'm not sure either side feels real good about... maybe that's a good sign."
DeNike, who has the reputation for being one of the most candid and respected U.S. terminal executives, does not see a bright future for West Coast ports in the immediate future "I don't think I've seen a more depressed time right now with West Coast terminal operators mainly because of the volume" as far as SSA is concerned. DeNike added "SSA handles about 25% of the man hours on the West Coast. In Seattle, our volume is down 60%. We have three large terminals, and the total volume in Seattle can be handled by one of those terminals. In Oakland, the volume is dropped maybe 30%, and in Southern California may be 25%."
DeNike said he saw major losses of cargo that shifted due to the uncertain labor situation during the protracted contract negotiations of 2022-2023 and feared that the bulk of the container business has permanently shifted to Gulf and East Coast ports “Maybe 40%, 30,% of that cargo will come back." He also added in regards to rumors of a lot of the BCOs (Beneficial Cargo Owners) who went to the Gulf and East Coasts "we also heard that some of the BCO have built warehouses and infrastructure in those areas, that means that they plan on staying there, right? So, I think no one knows for sure when and if this volume's going back.”
The result, he said, is that there have been major marine terminal service cutbacks in order to maintain profitability and this will impede access for importers and agricultural exporter members of AGTC in the coming months: “As a result, we've had to do things that normally we haven't, we haven't done in the past that is closing terminals during the week, not working nights, you know, that type of thing - to try to save money. When we operate a terminal, we need a certain volume.”
DeNike said ports in California were likely to rebound more than ports in the Pacific Northwest such as Seattle and Tacoma: “I think California is going [to rebound] better than the Pacific Northwest.”
DeNike particularly praised ILWU members at the Port of Oakland represented by ILWU Local 10 which he said had worked hard to keep the Oakland port operational during hard times. He cited the leadership of former ILWU Local 10 president, Melvin Mackay: “I have to take this time to say that I personally and SSA - really appreciates Local 10 for the way they handled this whole issue during this year." and added "you know this Local is very productive. I've always said the most productive on the Coast. And I believe that Oakland is going to come back pretty quick.”
DeNike also predicted a rebound in Southern California at the Ports of Los Angeles and Long Beach: “Obviously with them always being the first port of call and the population there, no matter what happens everyone's always pretty positive about volume.”
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