Friday, January 09, 2009

Waiting for a successful negotiation while watching the containers divert

The two sides in the ongoing labour negotiations between the ILWU and the BCMEA were set to meet on Friday, but no details have been released as to the progress of those talks, with the prospect of a full fledged shutdown of Canada's West Coast ports a possibility should things not get ironed out in short order.

Against that backdrop has come concerns over the fate of cargo shipments out of BC ports should the uncertainty continue on much longer, already diverted cargos have been reported as Asian shippers not wishing to be caught in the middle of any dispute send their vessels to Washington state ports for unloading.

While we await news from the negotiation table, the Daily News outlined some of the details on those cargo diversions in Thursday's paper.

Uncertainty surrounding port contract talks goes on
With an agreement still pending B.C.'s ports are losing out
By George T. Baker

The Daily News

On Friday, longshore foremen and their employees will meet again in Vancouver looking to forge a new contract and it cannot come soon enough as container shippers are leaving B. C. and heading to Tacoma and Seattle.

According to a shipping industry expert, 20 per cent of all West Coast container traffic has already been diverted away to Washington State facilities.

If an answer is not found soon, the impact could become much worse.

"Obviously, the uncertainty is losing Prince Rupert some business and in Vancouver, too," said Captain Stephen Brown of the Chamber of Shipping BC.

A full court press negotiation on Saturday came without a slam dunk deal but some issues were hammered out - one being a strike or lockout, which could have begun as early as Jan. 2, now is delayed at least until Jan. 12.

The British Columbia Maritime Employers' Association and International Longshore and Warehouse Union Local 514 in the latest talks managed to overcome an impasse on several issues that threatened to halt container traffic through Vancouver, Canada's busiest gateway for Asia imports,

Greg Vurdela vice presdient of the BCMEA, told the JOURNAL OF COMMERCE ONLINE "nobody is considering those options at this moment. The parties are continuing to talk."

If the union, representing 11 Prince Rupert ship and dock foremen, does strike, 200 port workers are expected to walk off the job in support.

While an averted strike is the best option for all involved, even the threat will help American ports siphon business from Canada.

"When competing ports access that cargo, they won't give it up easily," said Brown.

The Port of Prince Rupert's Fairview Container Terminals has already seen increased competition from the Port of Long Beach/Los Angeles port, which has offered up container shippers heading for Prince Rupert a $10 per TEU discount if they use that port instead, Long Beach is offering the price break because container traffic is down to its 2004 levels, which means that ports up and down the Pacific coast have to be more aware of competition for traffic.

Jim McKenna, chief executive officer of the Pacific Maritime Association, a San Francisco-based group representing dock employers at U.S. West Coast ports, told Bloomberg news that he expects 2009 and 2010 to both be bleak years in the shipping industry, meaning any traffic lost will be very hard to get back.

Brown said this is why more than ever a solution between the BCMEA and the ILWU needs to be reached as soon as possible.

"The Port of Los Angles/Long Beach has made no bones about it that they are going to target Prince Rupert volumes. So, anything that creates uncertainty is playing directly in the hands of the Port of Long Beach," saod Brown.

Complicating matters is the proroguing of federal government, which has halted anyh chance of a legislating longhsoreman back work. The soonest that could happen is Jan. 27 and that is only if the federal government decides to do it.

Prince Rupert Port Authority (PRPA) Communications manager Barry Bartlett said that federal mediators, who will be part of Friday's negotiation, are "hardwired" to federal bureaucrats in Ottawa. He said continuing negotiations are a good thing as both sides try to come to an agreement.

"In the big scheme of things, can this be resolved so that there is not much of a ripple effect on a broad range of people? Because it goes back to all the jobs that have been created over the last year," said Bartlett.

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