Supply Chain News / Risk & Compliance / Ports

Federal Hearing Held to to Address Impacts of Labor Dispute in Portland

June 25, 2012
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On the afternoon of Friday, June 22, 2012, U.S. District Judge Michael Simon held a hearing related to the recent slowdowns and disruptions at Terminal 6 – Oregon’s only international container shipping terminal. An ongoing labor dispute has significantly reduced productivity and caused costly delays at the facility, which is managed under a 25-year lease with ICTSI Oregon.

Two unions claim jurisdiction for the same jobs at the container facility. Approximately two full-time jobs are at the heart of the matter, involving the plugging, unplugging and monitoring of refrigerated containers.

The federal judge on Friday appointed former Oregon Gov. Ted Kulongoski to help settle a dispute between the two unions that has slowed the flow of cargo at the Port of Portland.

U.S. District Judge Michael Simon said the slowdown staged by longshore workers has caused economic harm to the region and the suffering will only get worse without a quick resolution. He ordered lawyers to meet with Kulongoski starting this morning.

Simon made the surprise announcement late Friday afternoon, at the end of a 3 1/2-hour hearing in which the National Labor Relations Board asked for a temporary restraining order that would require workers to speed things up or risk a contempt of court charge.

The judge did not act on the request, and it remains to be seen when operations will return to normal.

The jobs in question have been performed at Terminal 6 since the early 1970s under a collective bargaining agreement between the Port and its employees, who are members of the International Brotherhood of Electrical Workers (IBEW). Another union, the International Longshore and Warehouse Union (ILWU), is now claiming jurisdiction for these jobs and demanding that ICTSI Oregon, the Port’s lessee at Terminal 6, hire them to perform the work.

Amanda Gamblin, a lawyer for the company that operates Terminal 6, told the judge that the gates could close next week if normal operations don't resume.

The economic damage from the slowdown has not been tallied, but more than 1,000 regional businesses depend on the container terminal to get their goods to or from international markets. When ships are diverted and cargo must be rerouted, that adds costs to shippers and potentially devastating delays to companies importing or exporting perishable or seasonal items.

Portland's Terminal 6 is by far the smallest of the six container-shipping ports on the West Coast. It's at a disadvantage compared with the other Pacific ports because it's more than 100 miles from the mouth of the Columbia River, and ships need pilots to bring them to port.

Port managers are concerned that the shippers bypassing Portland might decide they can live without the port.

But now that a private company is in control, the longshoremen say the jobs must switch to them because of the collective bargaining agreement between the ILWU and the Pacific Maritime Association that covers all West Coast ports. It states that longshoremen maintain the reefers.

"It's possible that the ICTSI sold the same rock to different buyers," the judge said.

To help solve the dilemma, the judge turned to Kulongoski, a former labor lawyer who served as governor from 2003 to 2011. He has the power to order the sides to meet face-to-face and engage in serious negotiations. A status conference has been scheduled for June 29 if no deal has been reached by then.

Kulongoski will be paid $350 an hour, with the costs split between ICTSI, the unions and the Port of Portland.

"The longer this dispute takes to resolve, the worse it will be for everyone," the judge said.

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