As port terminal operators and shipping lines along the West Coast enter into contract negotiations with the International Longshore and Warehouse Union (ILWU), retailers are hoping history doesn't repeat itself. In 2002, a 10-day lockout of the union's 14,000 members caused a nightmare for supply chain managers across the country.
A bone of contention in those days was the desire of shipping lines and terminal operators to use automated materials handling systems to move cargo faster and more efficiently.
Mike Zachary, senior vice president of ports and maritime for Tompkins Associates, Raleigh, N.C., based supply chain consultants, expects technology to continue be a source of squabbles for years to come. However, he says, the 2002 debacle taught both sides some important lessons.
"Technology is here to stay," Zachary says. "The union has to accept technology because it was written into the 2002 labor agreement. There was 26% diversion from the West Coast ports in 2002 and they didn't get back 14% of it. Cargo is like the flow of water. It will travel the path of least resistance. Least resistance is better service time, better reliability, higher accuracy, lower cost. And that's what's scaring the west coast ports.
Zachary contends that the maritime industry has a lot of catching up to do when it comes to materials handling state of the art.
"The materials handling industry has been improving productivity, safety and efficiency for decades," he says. "Why can't the maritime industry catch up with it? It's the labor issues. We have to have more technology. From a security perspective the more visible the supply chain, the faster it moves, the safer it is from threat and theft. Ports are waking up to that fact kicking and screaming."
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