Editor's Note & Update: Last night the Acting Director of the Federal Mediation and Conciliation Service, Allison Beck, announced the appointment of a mediator in the West Coast ports dispute.  In her words: "Deputy Director Scot Beckenbaugh, a senior FMCS mediator with extensive collective bargaining experience in this industry, has been assigned to help the parties bring these important negotiations to a mutually acceptable resolution."  This changes the context for today's TTALK Quote but not the essential background.

Wade Gates is a spokesman for the Pacific Maritime Association, PMA, and today's quote is from a PMA press release on the deteriorating conditions in the West Coast ports.  PMA represents the port operators and shippers.  The workers at those ports are represented by the International Longshore and Warehouse Union, ILWU, and they have been working without a contract since last July.  And, yes, they have been working-sort of.  And, no, there has been no strike or lockout-yet. 

On December 15, the president of the ILWU, Bob McEllrath, explained the situation to his members this way:

But there is more here to be concerned about than simply the length of the conversation.  Ships are stacking up or turning away.  Cargo is not moving as it should.   According to PMA, the efficiency of the West Coast ports - most importantly those of Long Beach and Los Angeles - is only 40 to 60 percent of what it had been, and the ripples from those differentials are killing jobs and disrupting commerce in all sorts of places.

Jon Gold of the National Retail Federation highlighted some of the problems in a recent article:

McDonald's in Japan was, for a while, limiting customers there to small orders of fries only.  The medium and large sizes were off the menu because of port-caused shortages.  Reportedly, those restrictions were lifted yesterday (at least for now) after McDonalds (expensively) airlifted supplies to its restaurants in Japan.
 
lululemon athletica, the Canadian maker of sportswear for yoga and other activities, has reportedly lost millions from delayed shipments.

Those two examples are just the tip of the iceberg.  Lots and lots of companies have been hurt by the slowdown or fear that they might be.  In a joint report, the National Association of Manufacturers and the National Retail Federation estimate that if there is a full work stoppage on the West Coat - either strike or lockout - the cost to the U.S. economy could be $2 billion a day or more, depending on how long it lasts.

Against that background, 167 U.S. organizations sent a letter to President Obama on December 23, 2014, urging federal mediation.  Here is the  concluding paragraph of that letter:

Our understanding is that FMCS mediation must be voluntary.  The PMA, the owners, asked for mediation a while ago, and now the union has.  

The modern, supply-chain driven world only works if the ports work. The members of many of the associations that signed the December 23 letter to President are concerned about the timely delivery of the parts they need to keep working.  Others are worried about getting their goods to foreign customers.  The Motor and Equipment Manufacturers Association signed the letter as did the Global Automakers.  So too did the Mississippi Poultry Association, the Wisconsin Soybean Growers Association, and the Idaho Potato Commission.  We'll come back to some other affected companies in Idaho in a minute.

First, though, it is worth asking the question, what is at stake?  The answers seem obvious.  For the union it is jobs, and for the ports and shippers it is costs.  In an editorial on the issue last Sunday, The Long Beach Press-Telegram talked about the jobs this way:

So yes, automation is one issue.  Another is the difficulty of adjusting to larger ships with more containers.  And still another is the future of the West Coast ports.  Will the modernization of the Panama Canal - or planned Chinese-built canal for Nicaragua - ultimately take business away from the West Coast ports?  Our guess is that those issues are on everyone's mind, but they don't all fit easily into contract negotiations.  So the PMA and the ILWU fight about staffing.  The union says PMA is not using the crews they used to use.  PMA say that the ILWU is holding back the crane operators that are critical to getting the job done.  To quote Wade Gates again:

These aren't issues that the potato and alfalfa growers of Idaho can do much about.  They wish they could.   Their futures depend on it.    We'll end with these two observation from landlocked Idaho:

Karan Jones is the president of a customs broker/logistical services company in Boise.  Her small company has taken a big hit.  She told The Idaho Statesman:

The same Statesman article quotes Dusty Standlee, the president of Standlee Hay, a forage company with customers abroad, on the possible long-term effects of the slow-down.  He said:

And that too is a threat to those good paying jobs on the docks.