US shippers face tough road to gain national port productivity metrics
As published by Reynolds Hutchins in Journal of Commerce
Just minutes into its first meeting it was clear that U.S. shippers shouldn’t expect an easy path toward the creation of nationwide metrics to measure the nation’s port productivity.
The immediate roadblocks, stalemates and impasses the group confronted at the July 15 highlight the deep divisions among the members of the congressional working group and the challenges they’ll face in the months ahead. The Port Performance Freight Statistics Working Group is tasked by Congress to advise the Bureau of Transportation Statistics on how to best monitor port productivity on a national basis by Dec. 4.
“I think we all recognize going in this was not going to be an easy process. This is something new that hasn’t been done before,” Jon Gold, vice president of supply chain at the National Retail Federation.
NRF, the largest retail lobbying group representing more than 1.6 million U.S. retail establishments, helped spearhead the campaign on Capitol Hill for more federal oversight over port productivity. Shippers were to get Congress and the Obama administration more involved after the protracted labor dispute between the International Longshore and Warehouse Union and waterfront employers on the U.S. West Coast, which cost the retail industry some $6 billion, produced historic congestion and helped shave off 0.2 percent of GDP in the first quarter of 2015.
“Legislators have no visibility to what’s actually happening at our ports,” Gold said.
The fruits of their labor was the creation of the Port Performance Freight Statistics Program, part of the FAST Act highway bill passed last year. Under the law, the federal government’s Bureau of Transportation Statistics must produce an annual report to Congress on the state of port productivity at the top 25 ports nationwide. The legislation, however, does not detail what metrics or standards that report will use.
That’s up to the congressional working group.
DOT and BTS officials at the group’s first meeting said many, if not all, of those metrics were so-called “common accessible data” that could be compiled in the annual report to Congress. That includes terminal cargo tonnage; terminal acreage; vessel call, sizes dwell times; as well as berth number and lengths. There is also “potential common accessible data” that includes terminals’ tons per acre; tons per berth; vessel calls per berth; and tons moved per hour.
It will be up to the group to decide by Dec. 4 which metrics will be used. But far from bringing men and women from different industries and backgrounds together to work toward a common goal, the congressional working group that came together in mid-July seemed to make strange bedfellows of men and women wholeheartedly opposed to collecting any data whatsoever.
Port authorities, labor unions and railroads — who are typically accustomed to more adversarial relationships in the nation’s capital on the nation’s waterfronts — were more inclined to debate the group’s very existence than the merits of various metrics.
In the words of John Gray, senior vice president of policy and economics at the Association of American Railroads, “Just because Congress says ‘Go collect data’ doesn’t make it a good idea.”
AAR told JOC.com after the meeting that the group doesn’t have a formal position on the initiative — only that “there still remains unanswered fundamental questions that need to be addressed in order for more productive discussions to take place.”
Gray, alongside labor reps from the AFL-CIO and ILWU — the two groups are no longer tied to one another, though the International Longshoremen’s Association still belongs to the AFL-CIO— as well as at least one port authority, argued that a national database of port productivity statistics would not only be cumbersome, but it would also inevitably be used against them.
Jeffrey Pavlak, legislative representative for the AFL-CIO’s Transportation Trades Department, said some metrics that measure workforce productivity — such as crane moves per hour — that were simply off the table. Pavlak also voiced concern that the data collected would be used during contract negotiations to undermine collective bargaining.
“Despite claims by corporate shippers, the port metrics they are pursuing are not harmless statistical tools,” Pavlak said. “We know this because the productivity metrics that shippers want collected are the same type of data they have tried to use against workers in past disputes.”
Though, as Paul Bea, a maritime consultant at PHB Public Affairs in Washington, wrote in a note in the days just after the working group’s meeting: “Everyone at the bargaining table — unions and management alike — would already have every potentially useful statistic at their disposal.”
Pavlak, however, argued that the FAST Act’s own legislative history underscores labor’s reluctance to agree to routine port productivity reports.
Both prescriptive port metrics and monthly reporting requirement during maritime union contract negotiations were originally included in three separate transportation-related bills considered by Congress last year, before the eventual passing of the FAST Act. That includes a port performance bill from Sen. John Thune (R-S.D.), the Commerce Committee’s markup of the Comprehensive Transportation and Consumer Protection Act, as well as the Senate’s highway bill, otherwise known as the DRIVE Act. The language, however, was ultimately stripped from all three.
At both the markup of the standalone bill and the markup of the commerce surface title, every single Democrat voted against including the metrics because of concerns over collective bargaining. The monthly reporting requirement for union contracts were also removed when the Senate’s transportation bill went to the floor because of a similar perceived threat to labor.
Before the FAST Act passed at the end of the year, Rep. Dan Newhouse, (R-Wash.), made one last stand, attempting to include Thune’s original call for nationwide port metrics in the legislation. But, because Newhouse could not win a vote, he withdrew the provision on the floor rather than risk a losing vote, recounted Pavlak.
But before passing the House, the language was once again stripped from the bill and the provision was turned simply into a measure of throughput and capacity, and a working group was included.
“They were removed — and I maintain deliberately, and not by accident — because of the very justified fears,” Pavlak told JOC.com.
The railroads’ John Gray, whose group produces its own industry statistics for public consumption, noted that the intended use of collected data notwithstanding, once data is published it will and can be used by persons however they see fit. To assume otherwise, he said, would be “naive.”
Gray and Pavlak were joined in their chorus by some waterfront employers.
Roger Guenther, executive director of the Port of Houston Authority, pointed out that Congress had mandated BTS to collect data on port “capacity and throughput.”
“We, just like every terminal operator in this country, we all have this data,” said Guenther. “But, is it important to
Even if that data was important to anyone else, Guenther asked doubtfully if private terminals would ever agree to publically announce their actual capacity. Moreover, Guenther reiterated a previous position held by many U.S. port authorities that opposed the legislation in the first place: that publicly broadcast port productivity data could hurt free and fair competition among competing terminals nationwide.
Though, it should be noted, the American Association of Port Authorities, the largest U.S. port lobby, has softened that original stance.
“AAPA was opposed to ‘legislating metrics’ and instead called for a working group to determine how best to address calls for port performance data,” Susan Monteverde, the AAPA’s vice president for government relations, told JOC.com following the working group’s first meeting. “The working group needs to discuss more the reasons for certain metrics and what might be appropriate federally and what might be more appropriate at the port level.”
Nevertheless, ports, railroads and unions all agreed at the working group’s meeting that time and money were better spent investing in infrastructure where there is a real and present need. A national database of port productivity information only stands to hurt all the parties involved.
“This information could be used to hurt each and every one of us,” Michael Podue, who serves on the elected board of the ILWU, told the working group at its first meeting.
In the wings of the Department of Transportation’s conference room and the hallways of the department’s new headquarters in Washington, Gray and other like-minded group members asked one another why the group had even assembled.
“I’m not sure why John said those things. It’s unfortunate that he did,” Gold said. “Here, we’re trying to work collaboratively with all the stakeholders.” Gold’s response to the working group’s critics was simple: “If they don’t want to be there, they don’t have to be there.”
There is, after all, one group of stakeholders that wouldn’t be hurt by the collection of national port data: the shippers who pushed for the database to begin with.
But Gold was just one of three voices on the working group representing shippers’ interest. He was joined at the table by representatives from Lowe’s and Home Depot. And though agriculture exporters’ interests were represented in the audience, the size of the shipper contingent at the working group’s first meeting led Michelle Livingstone, Home Depot’s vice president of transportation, to say she felt “vastly outnumbered.”
“It’s lacking. It’s totally lacking,” Gold agreed, speaking with JOC.com after the working group’s meeting. “It’s unfortunate that BTS can’t bring in additional shippers: importers, exporters, manufacturers, agricultural interests.”
Gold and Livingstone were joined by Rick Gabrielson, vice president of transportation at Lowe’s, arguing that in their pursuit of a national port productivity database they were never concerned with workforce productivity or threatening the collective bargaining power of the labor unions. Capacity, first and foremost, was their primary concern, they said.
“In my opinion, it is not about collective bargaining and making changes there,” said Gabrielson.
At least one port authority representative at the working group’s meeting agreed. Gene Seroka, executive director at the Port of Los Angeles, took a stern tone with his fellow group members.
“This legislation was called for by numerous cargo owners because of perceived and real lack of transparency,” said Seroka. “We in the industry put ourselves in this position.”
It’s about time they did something, he said. But just what that “something” would be was uncertain as the group’s first meeting wound to a close, and remains uncertain days later.
“That’s still up in the air,” said Gold.
The group isn’t expected to meet again until sometime in September. Because of difficulty scheduling a group so large with members spread so far across the country, most correspondence will be handled via email and conference calls.
It’s enough for some to already wonder just how productive the port productivity working group will be.
“I’m going to go in with a positive attitude,” Gold said. “Folks need to understand and think long term, think bigger picture here. We know we have a crisis coming. If we can’t address it now and get folks thinking about there are going to be some big issues coming down the line.”