Port Labor Contract Extensions Could Bolster U.S. Meat Exports

In late 2014 and for much of 2015, U.S. meat exports were slowed by severe port congestion on the West Coast, which was the result of contentious, prolonged contract negotiations between port operators and the longshoremen’s union. The two sides eventually agreed to a master labor contract running through July 1, 2019, but the impasse inflicted severe damage on many sectors of the U.S. economy, including the U.S. meat industry.

Last week, West Coast port operators represented by the Pacific Maritime Association (PMA) submitted a formal request to the International Longshore and Warehouse Union (ILWU) to begin early negotiations on a contract extension beyond 2019. Although ILWU has not yet responded to the request, U.S. Meat Export Federation (USMEF) President and CEO Philip Seng says he is encouraged by this development. He notes that an early contract extension would ease international buyers’ concerns about port congestion problems resurfacing in the near future and help solidify the U.S. meat industry’s reputation as a reliable supplier.

The counterpart organizations on the East and Gulf Coasts – the U.S. Maritime Alliance (USMX) and the International Longshoreman’s Association (ILA) – have already begun early negotiations on a contract extension beyond the current September 2018 expiration date. Seng says it is also important that these talks produce positive results, as East and Gulf Coast ports are critical for meat exporters serving the Middle East, Europe, the Caribbean, Africa and the region surrounding Russia.


TRANSCRIPT:

Joe Schuele: For much of last year, U.S. meat exports were slowed by West Coast port congestion resulting from a labor impasse. While that dispute was eventually settled, it took several months before port traffic returned to normal. Last week, west coast port operators proposed to the Longshoremen’s Union that they begin early negotiations on a contract extension beyond the 2019 expiration date. U.S. Meat Export Federation President and CEO Philip Seng comments on these developments in this USMEF report.

Philip Seng: I’m encouraged by the fact they want to start talking now and I think this is something we need to do so we won’t have the disruption we had in trade in the recent past. We know this exerted a tremendous toll on our industry here, but internationally it was even more dramatic because every time you re-direct a shipment it means you are working with a customer overseas who is also having to re-direct a shipment. And so as much as this was difficult for our exporters, it was also very difficult for the buyers in these markets sourcing the supply. People start sourcing other supply sources other than the United States. In my meeting in North Asia especially, there were concerns about the reliability of the U.S. as a supplier. That’s the key thing, I think. We can see that there’s a willingness to work together, and also, depending on what kind of role the government can have in this thing, because now I think there’s enough recognition that hopefully there will be something done in order to mitigate these kinds of problems in the future.

Joe Schuele: Early contract negotiations are underway for the East and Gulf Coast ports, and Seng says it’s also important these meetings produce results.

Philip Seng: When we take a look at what we’re doing with the Middle East and what we’re doing with Europe and also Greater Russia – not so much into Russia, obviously – there’s a lot of new markets that we’re developing, so we’re actually ramping up more volumes going out of the East Coast than we’re had in the past. Whether it’s the West Coast or the East Coast, anything that would be disruptive is going to exert a toll on our industry and filter down to the producer.

Joe Schuele: For more on this and other trade issues, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.