Last week, the Seattle Times editorial board lauded a new agreement between the United States and China to send more varieties of apples to China.
Washington, being the nation’s largest producer of apples, could see a major boost in apple exports thanks to the deal – if those apples, in theory, can make it to China.
Events of late are posing a major detriment to the viability of the Ports of Seattle and Tacoma with the threat of long term repercussions that won’t easily be reversed.
This is a big deal nationally and in Washington, where roughly 40 percent of jobs in Washington state are connected to trade, according to the Washington Council on International Trade. Our state exported $81.6 billion worth of cargo during 2013, up 53 percent from 2010, according to U.S. Census data. Read more here.
The situation turned problematic in late October when cargo handling in and out of West Coast ports slowed down causing delays and congestion. Meanwhile, a group of employers and the Longshore Workers Union have been hashing out a new labor contract since last May.
The International Longshore Workers Union blames operational changes and industry pressures for the slowdown while the employer’s group, the Pacific Maritime Association, blames the union and calls it a negotiation tactic.
This past weekend, the PMA decided to lock out longshore workers and stall loading and unloading of ships at all 29 West Coast ports. Unloading and loading of ships resumed Monday, but probably not without the lock out leaving bruises – a 10-day shut down in 2002 cost an estimated $10 billion.
News stories have profiled the various consequences of the slowdown such as tons of apples left to rot on docks, Christmas trees that didn’t make it to Asia on time, even rationing of French fries in Japan, the military airlifting perishable food to overseas bases, and companies like Weyerhaeuser laying off employees. What hurts is that many of the people most impacted by the slow down – produce growers, warehouse workers and truck drivers – are not at the negotiating table.
In addition to those losses are the lost potential opportunity costs for the future. Sure, the eat-local movement has supporters, but eating food from across the globe shows signs of growth – lots of growth — that Washington depends on heavily.
“It’s not how many containers of goods couldn’t get through the ports, but how many exporters are just discouraged from trying to send goods overseas,” said Jock O’Connell, an international trade expert at Beacon Economics, a research and consulting firm. “It’s difficult to quantify – what didn’t happen because of this.”
Even if the contract dispute is resolved soon, the ports’ reputations are tarnished as difficult places to do business and unreliable for customers. And this is all happening as the trade industry gears up for the expansion of the Panama Canal next year which would allow ships to bypass the West Coast all together.
Last week, the PMA released details of its contract offerings such as $147,000 starting salary, healthcare completely covered by the employers, and a maximum pension of $88,000 per year. Those terms sound appealing, so I question why the union hasn’t signed on yet. O’Connell speculated it could have to do with keeping jobs viable in the long run.
“Every contract negotiation is an existential crisis,” he said.