Dockworkers, West Coast Ports Reach Tentative Agreement

aj — Wed, 30 Jul 2008 20:37:29 GMT

I had lunch with Chris Norek today. Among other things, we discussed the West Coast dockworkers contract disputes that have been hanging around for months.

Chris turned me onto a Wall Street Journal article (West Coast Port Pact Arrives Ahead of Rush that today announced a tentative agreement that may forestall another shutdown like the one back in 2002 that basically shutdown the U.S. west coast ports.

Assuming each side ratifies the deal, shippers will "have some assurance that there will be no major stumbling blocks for the Christmas season," said Chris Norek, a senior partner at Chain Connectors, Inc., a supply-chain consulting firm. "Shippers can now breathe a sigh of relief."

The agreement came after weeks of intense negotiation that took on an added sense of urgency after the old contract expired on July 1. In recent weeks, dockworkers began to flex their muscle by slowing down operations at the ports of Los Angeles, Long Beach and Oakland, resulting in what port operators said were significant productivity drops at the three ports.

As Chris correctly pointed out, this agreement comes in the nick of time for buyers.

Ironically, U.S. suppliers might have actually gained from another shutdown. Coupled with the falling dollar, rising taxes and costs to manufacture in China, and astronomic fuel and transport costs, a shutdown might have added to the overall impression that "insourcing" locally offers not only lower costs to buyers in the Americas and Europe, but may also provide them with logistical stability within a pan-pacific supply chain.

Follow Up On The Oil Speculators

aj — Wed, 23 Jul 2008 17:53:27 GMT

A few weeks back, I wrote about the open letter/e-mail sent from the 12 principals of the major U.S. airlines sharing their take that speculation and futures trading has had most to do with rising oil costs.

The e-mail (and my post) both linked to a site called Stop Oil Speculation Now that made it easy to share this concern with your government representatives.

Just after I posted that piece I followed the link, filled out the form, and submitted it. Piece of cake.

Wellsir, today I got a response from my Senator, Saxby Chambliss. Which is to say it was from his office, and a typical form letter - well meaning, certainly, but a form letter, just the same.

I say typical because it touched on many of the hot buttons surrounding this issue - not just the issue of speculation:

The key areas of a responsible energy policy that will reduce gas prices, lessen our dependence on foreign oil, and strengthen our economy include: increasing our domestic energy production, improving energy efficiency through technology, increasing conservation, diversifying our nation's energy supply through the use of renewable fuel sources, and ensuring transparency in our futures markets.

The letter went on to explain the senator's stance on each issue and, of course, tout his and his colleague's "bipartisan" efforts to solve "... the current energy crisis."

I can't decide if this is a shell game or not. Sure, domestic production and alternative fuels are awfully important. But the one issue that government, industry and lobbyists allowed to happen - if not directly caused - is presented as an afterthought.

This, from my response to the form letter:

In the near term, I urge you and your peers to address the issue of speculation with the greatest enthusiasm and force. We have allowed regulations and laws to creep through deregulation to a point that futures trading has traded our futures in ways we've yet to realize. This behavior - while perhaps not technically criminal anymore - is at the very least abhorrent. Lobbyists and industry have been allowed to create wealth based on a scam unchecked, and government must accept responsibility and take action to correct this now. All of the valuable efforts you mention in your response will take years from which to realize benefits - closing the loopholes, focusing the FTC on speculators in the U.S., and working with other countries to scrutinize the behaviors of speculators overseas will offer short-term relief.

Our system and officials have failed us and we are looking to you to take action to fix this. I strongly urge you to focus your short-term efforts on the speculative markets and their current regulations to ensure this doesn't happen again, while we pursue the noble efforts you've listed.

Manufacturers - and all businesses - must react to this. I believe that the credit and energy crises are related in a fundamental way: They aren't random. They are the result of deregulation and opening loopholes through which the rats entered the pantry.

Whether you choose to follow the link above or not, get in the grills of your representatives.

My advice: Raise holy ****.

MFGx Blog

Dockworkers, West Coast Ports Reach Tentative Agreement

Follow Up On The Oil Speculators