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Grain Handlers Await Union Response by Mateusz Perkowski Capital Press, November 29, 2012

Potential labor disruptions at six Northwest grain export terminals have grain companies in the region bracing for a backed-up pipeline of wheat shipments.

The International Longshore and Warehouse Union was given until midnight on Nov. 28 to respond to a contract offer from grain handling companies. The offer came after prolonged negotiations aided by a federal mediator.

The longshoremen's union said the earliest it can vote on the offer is at a meeting scheduled for Dec. 21-22, said Jennifer Sargent, a spokesperson for the union.

"We had reached a deadlock in the discussions with the federal mediation," said Pat McCormick, spokesman for the Northwest Grain Handlers Association, which represents the terminals. The dispute didn't pertain to salary or benefits but to "work rules" at the terminals in Seattle, Tacoma and Vancouver, Wash., and Portland, Ore., he said.

McCormick didn't specify which rules were in dispute, but The Oregonian reported that controversial issues included longshoremen being paid for union business while at work, the frequency of breaks and the availability of certain jobs to non-union workers.

The terminals wanted rules similar to the new EGT export terminal in Longview, Wash., which is under a separate labor contract, McCormick said. "That provides the new terminal with competitive cost advantages."

The ILWU characterizes the work rule dispute as a safety issue.

"We obviously don't want the profitable grain companies to gamble with our lives, yet their 'last, best and final offer' rejects our safety code that was built over 80 years in the blood of workers killed in the industry," Sargent, the union spokesperson, said in a statement.

If the grain terminals decided to enact the contract after Wednesday, that could eventually prompt the union to strike. The terminals may opt to lock out the longshoremen and bring in replacement workers, which may also disrupt productivity.

Sargent said the union doesn't believe the negotiations are at an impasse, opposes a lockout and wants to continue negotiations.

If the dispute prevents the terminals from loading ships with grain bound for the Pacific Rim, the problem for grain elevators and farmers would be compounded over time, according to industry insiders.

The severity of the problems would depend on how long a dispute impedes exports, said Blake Rowe, CEO of the Oregon Wheat Commission and Oregon Wheat Growers League.

A short disruption may not have much effect, he said. "In any supply chain, there's a little bit of flexibility. Not everything is run on a just-in-time basis."

The longer shipments are impeded, however, the greater the difficulty for grain suppliers, Rowe said.

"It's apt to cause a logistical logjam," said Russ Braun, grain division manager for Primeland Cooperatives in Lewiston, Idaho. "We're at the mercy of the river system."

A work slowdown by longshoreman earlier in autumn over another labor dispute impacted barge and rail shipping, already creating a backlog of wheat shipments, Braun said.

"We've been battling logistical issues for the past four to six weeks and it seems to be getting worse rather than better," he said.

A strike at the six terminals may not shut down grain exports, as three terminals in Longview and the Port of Kalama in Washington would likely continue operating, he said.

However, the Northwest's grain export capacity would still be diminished, and it's unknown if unions representing barge, tugboat and rail workers will join in the unrest, Braun said.

A buildup of wheat in storage facilities along the Columbia River could reverberate through to upcountry elevators and farmers, said Rick Wekenman, assistant manager of the Palouse Grain Growers cooperative in Palouse, Wash.

If barges along the river became tied up because they're unable to unload grain, that would further hinder shipments, he said. "If we can't deliver, we can't get paid."

Farmers and elevators beyond the Northwest would also be affected by a disruption to the six export terminals, said Rowe.

Shipping corn and soybeans from the Midwest through other ports along the Gulf of Mexico or the Great Lakes may be cost-prohibitive if other global exporters are selling those crops at lower prices, he said.

"If there's an alternate suppliers, you potentially lose the business," Rowe said.