For the West Coast waterfront, the defining issues for 2009 will be the manner in which the industry copes with reduced volumes and the corresponding increase in competition for discretionary cargo. Despite this downturn, the industry has the opportunity to tackle issues that have been somewhat masked by record-breaking volumes in recent years. If we adapt, as necessary, we will put ourselves in a position to succeed when the global economic climate improves.
The 2008 longshore labor contract, negotiated between the Pacific Maritime Association and the International Longshore and Warehouse Union, provides a framework for six years of stability on the West Coast waterfront. Among other provisions, we now have contract language that provides a clear path for automation of essential terminal functions. Working in partnership with the ILWU, we will seek to maximize terminal efficiency — and make the West Coast stronger and more competitive, particularly as volumes return to previously strong levels.
It’s important to remember that roughly half of the cargo shipped through the West Coast is discretionary — bound for the Rocky Mountain states, the Midwest and other points east. If the West Coast does not innovate, some of that cargo will be lost to the East Coast, Mexico or Canada. I am confident of the industry’s response, and I am hopeful that policymakers from Washington, D.C., to Sacramento will make trade infrastructure a continued priority. The future of our industry, and of our economy, demands no less.