Issue 381, December 16, 2002

As you know, the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) reached a tentative agreement on November 24, 2002 to settle the port dispute that had disrupted the West Coast ports during the months of October and November. While this was certainly good news for all parties importing from and exporting to the United States, it did not mean that business would return to normal immediately. From a labor standpoint, the contract has not yet been ratified and, from an operational standpoint, the problems caused by the lockout and subsequent backlog have not yet disappeared.

Despite the fact that there is no longer a backlog of vessels waiting in line to be unloaded, congestion remains a problem, particularly in the ports of Los Angeles, Long Beach, Oakland and Seattle/Tacoma. There are space shortages at various terminals due to the huge number of containers, both loaded and empty, that remain on hand. Essentially, vessels dropped containers off and sailed empty during the backlog period in October and early November, causing a major disruption in ship rotations, which still have not returned to normal. This lack of space is greatly increasing the time to unload vessels, and also to pick up containers at the piers. There is also a chassis shortage, which is making the problem even worse. We expect this situation to continue through the end of the year, and most likely into the first part of January.

As for the contract ratification process, the ILWU held caucuses last week to review the contract, and the leadership approved the contract. This week, the rank-and-file are holding work stoppages so that the entire membership can be briefed on the contract details. These work stoppages are as follows:

Monday December 16 - Southern California - 24 hour stop-work meeting
Tuesday December 17 - Northern California - 24 hour stop-work meeting
Wednesday, December 18 - Oregon - 8 hour stop-work meeting (covering night shift only)
Thursday, December 19 - Washington - 24 hour stop-work meeting

The ILWU membership will be voting on the contract from January 9th through January 11th. If all of the major ports have a vote of over 50% acceptance, then the outcome will be known the week of January 13. If any major port is under 50%, then each individual vote has to be counted in every port, which would take 1-2 additional weeks. If the ILWU approves the new contract, then the PMA membership holds their vote (which takes about ten days). which means it should be early February before official ratification can occur.

This is the current situation, and we will continue to keep you posted on all developments.

Most sincerely,

Gary Osterbach
Director, Ocean Services
Danzas AEI Intercontinental

Please note that due to the complex nature of the subject matter, DHL Danzas Air & Ocean cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with DHL Danzas Air & Ocean.