California’s Port Congestion, Focus on Disputes
One-third of California’s economy is supported by the movement of freight and all its components, including the seaside ports systems. In 2013, it brought in over $700 billion and supported about 5 million jobs. Some of the nation’s biggest ports are those in California, including Los Angeles, Long Beach and Oakland, and their system of moving freight needs to be vastly improved if the market is to continue to grow.
In July of this year, California Governor Jerry Brown became the fourth governor to create a plan in hopes of improving the transportation of goods in his state. He issued an executive order, giving agencies within California a year to come up with a systematic plan of action “to improve freight efficiency, transition to zero-emission technologies, and increase competitiveness of California’s freight system.”
The first call to action was in 1998 by Gov. Pete Wilson, who presented comprehensive research and recommendations in his Statewide Goods Movement Strategy. Four years after Wilson, Gov. Gray Davis issued the Global Gateways Plan of 2002. Then in 2005 and 2007, Gov. Arnold Schwarzenegger proposed the Goods Movement Action Plan. Yet the state hasn’t fair much better for all the efforts.
State agencies will spend most of timeframe looking at trade passages connecting California’s seaport, airport and border crossing markets with the rest of the nation, which saw $70 billion in trade pass through last year alone. While the three ports were able to tackle 43% of all imported containers coming to the U.S., think of what they could do without labor disputes and port congestion holding them back. Currently, there are sizeable amount of trade flowing to other ports that can handle the loads, and if something isn’t done, it’s likely the ports in California will see less and less incoming freight putting jobs and its economy at risk.
One problem that needs to be addressed is labor disputes. Contract negotiations in 2014-2015 between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) vastly slowed port business and cost the economy a pretty penny. While landlord ports can’t get involved in these types of disputes, Gene Seroka, executive director of the Port of Los Angeles, spent every day conferencing with President Obama’s economic team during the talks.
In January this year, Labor Secretary Thomas Perez was able so successfully arrange an agreement between the two groups. Seroka is confident that Obama’s administration will help to continue improving the productivity of the West Coast ports, with a focus on creating the infrastructure to get cargo in and out of port flawlessly. Perez has an open dialogue with the Port of Los Angelos to maintain a good working relationship for the future.
Lessons were learned by both parties that an importance needs to be put on labor unions and ports and the like to avoid further long and drawn out disputes or strikes. While such events put a giant strain on the ports, it’s not the only focus Gov. Brown wants them to focus on; it’s just the start. To kick off efforts, the California state legislature will be meeting in August for a special session to start working on improving the deteriorating transportation infrastructure.