There has been a massive backlog for months now of cargo ships waiting to drop their goods at West Coast U.S. ports. As I noted last week, that delay is part of a cascade of problems bedeviling supply chains and causing shortages in all manner of goods. A major contributor to the delay is the fact that the ports don’t operate on a 24/7 basis, despite that being the norm for shipping in the rest of the world.
So, why don’t they? It is not because of the state or federal government. There is no rule or regulation as far as I can tell saying that the ports cannot operate around the clock. The primary issue appears to be the unions, whose contract effectively dictates when work can be done.
The Journal of Commerce has called “terminal productivity and, by extension, longshore labor” the real issues that have been creating problems at the ports. Unfortunately, few people want to create a stir about it. “You don’t even talk about that. You know, we don’t even try to influence that. But it’s really the root cause,” an anonymous carrier industry source told the publication.
The current labor-management contract between the Pacific Maritime Association, a trade association for the world’s largest cargo shippers and terminal operators, and the International Longshore and Warehouse Union (ILWU), which represents most dock workers in California, Oregon, and Washington state, makes for enlightening reading. First, dock work is a pretty good gig, with a base pay of $46.23 per hour (about $96,000 annually) and higher rates for workers with specialized skills. How high? The Los Angeles Times reports that the average wage for unionized dockworkers is $171,000 annually. Most workers do the standard eight-hour days five times a week but can be required to stay on the job for up to two additional hours while getting overtime. After that, they can go home if they want.
The simple way to ensure around-the-clock operation at the ports without forcing the workers to do even longer shifts would be to create multiple different shifts and stagger them across the week. Maybe throw in a little extra to get people to work a midnight-to-dawn shift. It’s not like there is a shortage of work to be done and more workers couldn’t be hired.
Except the union contract limits the port to just three shifts in a day: two lasting eight hours and another lasting just five hours. All three go from Monday to Friday. These shifts overlap slightly but even if they didn’t, they would still only total 21 hours. Keeping the ports open for 24 hours would require the port to pay overtime every single day. On top of that, the contract says that any work done on weekends or holidays is automatically time and a half too. So even if the port could offer shifts with a five-day work week that started on, say, Wednesday, it would have to pay those workers the equivalent of six days.
Also, holidays that require paying time and a half include not just the regular federal ones but the birthdays of Cesar Chavez, founder of the United Farm Workers, and Harry Bridges, founder of the ILWU. The contract also counts July 5 as a holiday. The day after July 4 is “Bloody Thursday,” commemorating an incident in a 1934 strike in which police killed two rioting dockworkers.
Automation would speed things up, but the ILWU has fought tooth and nail against any step in that direction. “We were totally opposed to fully automated terminals and got the guarantees from our employers that they would not construct them during the life of our new package,” said ILWU President Harrold Daggett, when the current contract was reached two years ago. Last month, the union announced that its members would not work on any automated vessel that docks at a U.S. port. “Now more than ever, dockworkers from around the world, joined by all maritime workers, must unite to fight this important battle against automation,” Daggett said.
In short, the contract made it incredibly expensive for the ports to run 24/7 well before the COVID-19 outbreak began and limited the ports’ ability to modernize. Couple that with the surge in demand after the outbreak and the safety and screening protocols required to deal with the outbreak, which further slowed productivity, and it is a wonder that ports get as much accomplished as they do.