Agricultural exporters hope resolution of the West Coast port labor crisis will stick. They face months before shipments are back to normal and probably longer to restore overseas markets.
How soon a massive backlog of containers caused by a contract dispute between port operators and the Longshore union can be cleared remains unknown, say agricultural exporters, who have lost billions of dollars in business as a result.
The union representing workers at 29 West Coast container ports reached a tentative contract agreement with port operators on Friday. Contract ratification votes by International Longshore and Warehouse Union members at the ports are expected to take weeks.
Ports resumed operations over the weekend, but must work through a backlog of dozens of ships anchored out and waiting to unload. Tens of thousands of containers, many filled with agricultural crops and products ranging from apples and potatoes to hay, are also waiting at the ports to be loaded on the ships for the 15-day return trip to Asia.
The number of containers on a ship varies from 5,000 to 18,000, but the average on the West Coast is 7,500 to 8,000, said Peter Friedmann, executive director of the Agriculture Transportation Coalition. Normal turn-around time to unload and load a ship varies from one to five days depending on the size of the ship and how much is being offloaded and loaded, he said.
It also remains to be seen whether the new contract will embolden exporters and members of Congress to try to change federal labor laws to prevent future disruptions.
“It is appropriate to evaluate all options that would end the economic threat posed by such disputes in the future,” Rep. Dan Newhouse, R-Wash., said in a statement.
Chris Schlect, president of the Northwest Horticultural Council in Yakima, said often, when a labor dispute is resolved, interest in changing the law dissipates.
But, he said, this crisis was big enough that people may be more willing to look at it, and more will be interested after the contract is ratified because comments could no longer derail it.
Schlect said he has not heard of anyone going bankrupt because of the port slowdown but wouldn’t be surprised if that happens among tree fruit growers because of many factors that have made it a poor year.
European apples have been displacing Washington apples in Asian markets because of the slowdown, and it will take “a lot of brand building to get ourselves back into the marketplace and at the top of minds of consumers,” said Todd Fryhover, president of the Washington Apple Commission in Wenatchee.
Washington represents about 65 percent of all apples grown in the United States and 90 percent of all export, said Fryhover. About one-third of apples go to Mexico and Canada, the majority of the balance goes to the ports of Seattle and Tacoma for export.
“Exports are critical for the success of the Washington apple industry,” said Fryhover.
The apple industry relies on more than 60 countries to maximize revenue. The Christmas and Chinese New Year, in particular, are two of the largest shipping time frames for apple growers.
“This particular port issue has taken a real hard toll,” said Fryhover.
The port shutdown could easily affect the apple industry for up to two years. To have something out of farmers’ control affect business is frustrating, said Fryhover.
“To see something that is completely unforeseen come out and affect their bottom line – that they didn’t have a hand in – is a difficult concept to accept,” he said.
Friedmann is pleased that the dispute is ending, but clearing the congestion at ports will take months.
The coalition will continue to push the Pacific Maritime Association, which represents port operators, and the ILWU to improve West Coast port productivity, said Friedmann.
“U.S. agriculture can recover but only with a collective effort,” said Friedmann. The PMA and union need to improve the pace of terminal operations, automation and eliminate outdated labor and management practices, he said.
The coalition is “totally for” changing labor law to prevent future disruptions, said Friedmann. He estimates agricultural export losses at $1.75 billion per month for two to three months.
Shelly Boshart Davis, vice president of international sales at Bossco Trading, a rye grass straw exporter in Tangent, Oregon, said her company has had 140 containers of straw, worth $500,000 to $700,000, at the ports of Portland, Tacoma, and Seattle since Jan. 15.
“We need to get containers moving,” she said. “We will be OK if we can, but we can’t do another six months of this.”