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Long, Costly ILWU Portland
Port Dispute Nears End

by Bill Mongelluzzo
Journal of Commerce, December 18, 2014

(Benjamin Brink) Container shipper Hanjin announced in October that it intends to stop serving the Port of Portland. The International Longshore and Warehouse Union is engaged in a high-stakes game of work stoppages and slowdowns at the Port of Portland that is moving slowly but steadily toward a conclusion.

The battle, which has been underway for more than two years, has already cost the port millions of dollars. It could prove costly to the union as well if the ILWU ends up paying damage claims that will total in the millions of dollars if awarded.

U.S. District Court Judge Michael Simon on Tuesday advanced the case by ruling there was "clear and convincing evidence" that the ILWU from July 20, 2012, to Aug. 13, 2013, engaged in illegal work stoppages and slowdowns at the port's only container terminal that is operated by ICTSI. The work slowdowns took place even though the court had served the ILWU with a preliminary injunction admonishing the local to inform its membership to cease the job actions.

Judge Simon said the evidence supporting work slowdowns for the period after August 13, 2013, going forward, was not compelling enough to convince the court that the work stoppages and slowdowns had continued, so the ILWU has declared a victory on that count. The matter has been complicated by the fact that the ILWU on the West Coast has been working without a contract since its previous contract expired on July 1 and there is no no grievance procedure in place to address work stoppages and slowdowns.

Nevertheless, ICTSI and the port say poor productivity has continued non-stop since 2012 when the ILWU claimed jurisdiction over the equivalent of two jobs plugging, unplugging and monitoring refrigerated containers at Terminal 6. That work had been performed since 1974 by members of the International Brotherhood of Electrical Workers.

The port and ICTSI said work slowdowns and stoppages are still in progress. ICTSI stated that the ILWU engaged in 21 work slowdowns last month, and is carrying out additional stoppages and slowdowns at a pace of about one per day in December. Crane productivity is consistently below 20 moves per crane, per hour, sometimes reaching a low of 11 gross moves per hour. Before 2012, the ILWU in Portland had maintained crane productivity in the upper 20s per hour.

The port reported earlier this year that only on one day -- Super Bowl Sunday -- did the ILWU return to its historic level of productivity. The ILWU has stated that the poor productivity in recent years has been due to defective cargo-handling equipment. The port commissioned a study of the equipment and authorized repairs as needed, the port stated.

The past two years have been costly, financially and reputation-wise, for the port. Portland since 2012 has paid out millions of dollars in incentives to the container lines that serve the port to convince them to continue calling there. Over a five-to-six week period in 2012, Hanjin Shipping Co. and Hapag-Lloyd omitted direct calls in Portland because productivity had deteriorated significantly. Hanjin has threatened to cease calling Portland if productivity continues to lag.

According to a Portland Port Commission docket item last week, the port in 2012 paid $175,00 in a "carrier support program" to keep the lines calling in Portland. Also in 2012, the port paid $2.7 million to ICTSI in a cost-sharing program to compensate the terminal operator for increased expenses due to the work slowdowns.

The Dec. 10 docket item also noted that in 2013 Portland paid up to $1 million in a carrier incentive program resulting from the work slowdowns, and $3.4 million in cost-sharing incentives to ICTSI in 2013. The port renewed the carrier incentive program in 2014 with a base incentive of $20 per container, plus an "added-volume" incentive of $25 per container for all container lines that call in Portland. The total costs for 2014 have not been released.

Finally, at the Dec. 10 commission meeting, a 2015 incentive program of $25 per container for all carriers was approved. The program encourages cargo growth by eliminating the incentive for empty containers.

The reputation of Oregon's only container port had dropped so low that Gov. John Kitzhaber in December 2013 brokered a deal that awarded the refrigerated work to the ILWU. The agreement was that productivity was to return to normal levels. The port authority this summer said that productivity remained low, and on Aug. 22 it gave the ILWU a 30-day notice that the reefer work was being returned to the IBEW.

According to port spokesman Josh Thomas, Tuesday's ruling by Judge Simon was a significant event in this case. "Judge Simon found the ILWU in contempt for slowing down production at Terminal 6, and the union was ordered to pay the NLRB's attorneys' fees and costs in bringing the contempt motion."

This case is far from over, with five related legal actions in play involving the National Labor Relations Board and the courts. It is yet to be determined if Judge Simon's ruling will result in improved productivity. However, having found the ILWU in contempt for the one-year period from July 2012 to August 2013, "it is clear that Judge Simon will not look favorably on slowdown activities," Thomas said.

Shipping-industry experts are baffled by the actions of the ILWU to drag out an incident two years ago involving the equivalent of two jobs. In an interview earlier this year, Port of Portland Executive Director Bill Wyatt charged that the union's real intention is to make conditions so difficult for ICTSI that the terminal operator will leave Portland and the port authority will return to its historical status as an operating port.

Wyatt said Portland lost a great deal of money when it operated Terminal 6, with work practices in Portland that existed nowhere else on the coast, and the port has no intention of operating the container terminal no matter what happens with ICTSI. In an interview earlier this year, Leal Sundet, ILWU coast committeeman, denied that the union is attempting to drive ICTSI out of Portland, and in fact the ILWU was happy when the port got out of the operating business. The ILWU declined comment for this story.

The next legal step in the process will be for the full NLRB board in Washington to consider the unfair labor practices determinations made by two NLRB administrative law judges in this case. There is no specified time line for that action. If the U.S. District Court is to assess damages against the ILWU, it must first wait for the NLRB determination. No dollar amount has been publicly released, but industry executives involved in the case say potential damages could easily total in the millions of dollars.

Bill Mongelluzzo
Long, Costly ILWU Portland Port Dispute Nears End
Journal of Commerce, December 18, 2014

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