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Statement of ICTSI Oregon, Inc. on new labor deal

Friday, 27 February 2015 | 13:00
Now that the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) have reached a five-year contract agreement, West Coast ports should experience improved productivity from ILWU workers.  The ongoing issues at the Port of Portland, however, are more complicated than at other ports. Replacing lost business due to Hanjin’s recent departure and ensuring the long-term viability of Terminal 6 will require more than a new contract. It will require the ILWU to end an almost three-year campaign to undermine ICTSI Oregon’s success at Terminal 6.

How We Got Here…The Original Lease
At the heart of the current dispute is the fact that ICTSI Oregon honored its lease agreement with the Port of Portland. We acted as a good faith business partner, and the ILWU has been punishing us, the Port and local businesses we serve ever since.

Prior to signing a 25-year lease agreement with ICTSI Oregon to run Terminal 6 in 2010, the Port of Portland only recorded a profit twice in 38 years. The Port lost $17 million in 2010. It’s no wonder the Port decided to lease the terminal and act as a landlord instead of port operator.  

Though our lease with the Port gives us wide latitude to attract new business and improve workplace standards in line with other American ports, it also imposes certain strict limits. Specifically, ICTSI Oregon is required under the lease to abide by the jurisdictional work arrangements the Port has with various unions represented at Terminal 6.

This lease requirement is critical to understanding the situation at Terminal 6, Hanjin’s recent departure and challenges facing the terminal’s viability.
After ICTSI Oregon took over Terminal 6 in 2011, we enjoyed a good working partnership with the ILWU. Productivity levels were decent, and no major disputes arose. That all changed in June 2012, when ILWU leaders tried to grab work involving the handling of refrigerated containers from Port electricians represented by the International Brotherhood of Electrical Workers. Despite the fact that these Port employees had performed the work since 1974, the ILWU demanded that we assign this work to its members. ICTSI Oregon explained that this was impossible because we are committed both legally and ethically to abide by our lease with the Port and had no right to interfere with the electricians’ performance of the work.

In response, the ILWU threatened to chase our customers, including Hanjin, from Portland and to shut us down. The union made good on its threats and began work stoppages, slowdowns, safety gimmicks, and other conduct deliberately intended to hurt ICTSI Oregon. This is not just our opinion. These are among the facts confirmed by two independent judges from the National Labor Relations Board in separate rulings against the ILWU. Additionally, federal judge Michael Simon held the ILWU in contempt of court for failure to obey his injunction against further slowdowns.

Unfortunately, the ILWU refused to let up on its efforts to hurt ICTSI Oregon. After the labor agreement with the PMA expired in July 2014, the ILWU used the contract’s expiration as an excuse to drop productivity even lower. Though other West Coast ports have experienced similar tactics during the recent contract negotiations, the ILWU’s campaign against ICTSI Oregon has been much more severe.

Hanjin has now had enough, which is a major blow to our region’s economy. Hanjin represented 78 percent of Terminal 6’s revenue last year, and its departure will cost local jobs and adversely impact businesses of all sizes.

Commitment to Oregon’s Growth
As a regional economic catalyst, ICTSI Oregon is committed to making Terminal 6 a world class terminal that drives economic growth and creates jobs. Our management team has decades of combined experience managing West Coast terminals.  ICTSI Oregon believes that Terminal 6 offers tremendous advantages for carriers and remains committed to attracting new business.

The question now is whether the ILWU will act in good faith with us and the Port to restore the confidence of Hanjin and other potential carriers.

ICTSI Oregon stands ready to do our part. But we cannot do it alone. It’s time for the ILWU to put aside its petty grudge of the past regarding the reefer work and become a partner for progress.

IOI is a subsidiary of ICTSI, an international operator of common-user container terminals serving the global container shipping industry. ICTSI is the largest port operator in the Philippines and has a portfolio of 29 container terminal operations in 21 countries across six continents.
Source: ICTSI
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