Why Obama hasn’t rushed to rescue US West Coast ports Mark Szakonyi, Associate Managing Editor | Dec 18, 2014 5:18PM EST As retailers sweat their post-holiday restocking and watch their profit margins shrink amid rising costs of U.S. West Coast port congestion, a common refrain is heard: Why isn’t President Obama stepping in? Shippers, ports and members of Congress have bombarded the White House with letters pleading for the president to send in a federal mediator to help resolve contract talks between the International Longshore and Warehouse Union and West Coast port employers. Major retailers, including Macy’s, have reportedly used more personal channels to urge the president to help end congestion that is costing shippers millions of dollars. The White House has been mostly silent in response. The administration’s only statement came last month, when a spokesman said the president was confident both sides could reach a deal “through the time-tested process of collective bargaining.” The bandied-about explanation heard from shippers, carriers and ports is that the Democratic Obama doesn’t want to anger the unions that helped him win two straight presidential elections. They point to how his predecessor, President George W. Bush, invoked the Taft-Hartley Act to end a 10-day lockout on the West Coast in 2002. The “Obama is soft on the unions” explanation seems questionable. First, the president doesn’t assign the Federal Mediation and Conciliation Service to negotiations. The FMCS is an independent agency that becomes involved at the request of negotiating parties. The president can urge the parties to accept mediation, as the White House reportedly did behind the scenes during a 2012 impasse in bargaining on an East and Gulf coast longshore contract. But ultimately it’s up to the negotiating parties. The ILWU and Pacific Maritime Association, which represents waterfront employers, would have to jointly request a federal mediators’ help in the West Coast talks. That apparently hasn’t happened. What about the Taft-Hartley Act, which Bush used to end a 10-day West Coast port shutdown in 2012? It’s not clear that’s a good option either. Although waterfront employers say the ILWU is slowing down work, a claim the union rejects, there haven’t been threats of strike or lockout. According to Taft-Hartley Act language, the administration can invoke the act only when a a threatened or actual strike or lockout affecting an entire industry . . . engaged in trade, commerce, transportation, transmission or communication among several States or with foreign nations...will imperil the national health or safety. Since Taft-Hartley was enacted in 1947, the act has been invoked 32 times to end labor disruptions. During the last four decades, however, it’s been used only twice -- to end the 2002 ILWU lockout, and when the Carter administration unsuccessfully sought a back-to-work injunction against striking coal miners during the 1978 energy crisis. Taft-Hartley injunction requests are a last resort, and aren’t always successful. Despite cries for action, it’s unclear that Obama is facing economic pressure to intervene in the ILWU-PMA talks. While the alleged ILWU slowdowns are hurting shippers and transportation providers — from Lululemon Athletica to FedEx — earlier predictions that Christmas could be “stolen” don’t resonate. Most goods are still getting to shelves, albeit slower and at more cost to shippers who have been forced to use truck instead of rail, or air freight services for goods normally moved by sea. For companies paying those extra costs, the West Coast port delays are a huge problem. Two reports have estimated that a West Coast port shutdown could cost $2 billion a day in economic impact. That’s not a small sum, but it’s barely a blip in a U.S. economy with $17 trillion annual GDP. Economists aren’t warning that delays will crimp holiday spending or even shave off GDP growth in the fourth quarter. The national media have hit the issue, but those stories are generally relegated outside the front pages. For most media, particularly TV journalism, the story lost some sparkle once it lost that “man on the street” impact. Most of the public remains unaware of West Coast port congestion. Ask a typical American about West Coast port delays, and chances are you’ll get a blank stare. Those who have heard about it aren’t likely too worried it will crimp their holiday season, or arent aggravated enough to justify a political fuss. When my fiance heard that some items for our wedding were stuck at the Port of Los Angeles, she complained to me and asked whether Obama was aware. He is, dear, I said. Its just not at the top of his list.
Posted on: Tue, 30 Dec 2014 00:19:28 +0000
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