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Today, international trade is at a standstill in 29 ports across the Western United States. Normally bustling docks are quiet, as cargo ships stack up offshore in the Pacific Ocean.
The ports are closed because an aggressive union, the International Longshore and Warehouse Union, recently instituted a work slow-down that cut productivity in half. Freighter and train schedules were thrown into disarray, yet the longshoremen still received full pay. The union is fighting to keep new, efficient technology out of our ports. In response, last Sunday the business alliance that runs all 29 ports decided to shut them down entirely and lock-out the longshoremen.
These 29 ports shipped $300 billion in goods last year, and are responsible for half of our trade. According to several media sources, economists estimate that the shutdown is costing our economy $1 billion a day. Using Atlantic Ocean ports is not really an option, because most Pacific ships won’t fit through the Panama Canal.
It will get worse. Because American businesses are highly efficient, and rely on “just-in-time” inventory and manufacturing, the costs of the shutdown will skyrocket dramatically in the coming days. The shutdown is damaging millions of American businesses, from retailers to manufacturers to farmers. Already, U.S. factories are reporting shortages of needed supplies and parts—shortages that will soon force some factories to go idle. American exports sit idle on our docks instead of in foreign markets. And our retailers are losing time in the busy season to stock the shelves for the Christmas shopping rush.
What a disgraceful situation. We are the world’s greatest economy and the indispensable engine of international trade. It is an outrage that a few thousand workers can bring half of our nation’s international trade to a screeching halt. This is the United States of America, not France or Argentina. Americans are supposed to compete, innovate, and work hard.
To be fair, the longshoremen have tough, dangerous jobs. They load and unload heavy containers in a demanding, fast-paced environment. Last year, 5 men died in work accidents. But they’re well-paid, earning between $80,000 and $158,000 per year. That’s why this fight is not about wages or workplace safety, it is instead about our economic future—namely, the freedom for our ports and shipping companies to innovate with efficient new technology.
Already, American ports are a decade or so behind our top competitors in Europe and Asia. The longshoremen are worried that new cargo-tracking and handling technology will make U.S. ports more efficient and eliminate unneeded jobs. In most places, that’s called progress. American business is world class because it is efficient, competitive, and constantly adopting the best technology.
That’s why it’s dangerous to make any concessions to the longshoremen on the technology question. Every inefficiency in our shipping system has a ripple effect across the economy, raising prices for American consumers and making our exports less competitive on world markets. It’s not fair for a few thousand people to literally endanger American business and prosperity, both today and in our future.
Sadly, it’s also not surprising. The United States’ maritime shipping policy is an unmitigated disaster. It used to be that American clipper ships and freighters once proudly plied the world’s waterways. However, after fifty years of protectionism, over-regulation, and subsidies, our own merchant fleet has become irrelevant. We don’t build many ships anymore, and most U.S. goods move under the flag of other countries like Panama or Liberia.
Hopefully, the current impasse will end quickly and trade will resume. But the failures in the system are obvious, and there is a long-term threat to America’s ability to compete on the world stage. Congress needs to rework Depression-era labor and infrastructure laws that let ten thousand longshoremen put a chokehold on American commerce. Our ports desperately need a regulatory framework that lets them adopt the most efficient cargo-processing systems— and, even better, a framework that would also force them to more openly compete against one another for business and for labor.
Sadly, because of the entrenched interests involved here, it’s doubtful Congress will do anything at all. So until they act, we can all sit back by the bay and watch the willful destruction of billions of dollars in American wealth.