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Market Matters Blog           03/23 11:44
West Coast Port Tension Still Simmering
Overheard at NGFA
Ice in Upper Mississippi River Melting; Ice Jams a Danger 
STB Wants Weekly Railroad Service Reports to Become Permanent
Great Lakes Nearly 88% Covered in Ice
Canadian National Railroad Reaches Last Minute Deal With Unifor
White House Sending U.S. Labor Secretary Perez to Referee Port Disputes
"Do or Die" for West Coast Labor Talks 
A Pensive Moment in the History of Pit Trade
Labor Dispute Gets Meaty

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West Coast Port Tension Still Simmering

   OMAHA (DTN) -- It's been one month since the Pacific Maritime Association 
(PMA) and the International Longshore and Warehouse Union (ILWU) tentatively 
agreed on a new five-year contract, covering workers at all 29 West Coast 
ports. The next step will be taken sometime during the week of March 30 when a 
caucus of 90 union delegates will decide to recommend it for consideration by 
the full membership. Then, every union member will receive a copy of the 
tentative agreement for discussion at their local union meeting. After that, a 
vote to ratify (or not) is then taken by secret ballot sometime during April.

   There has been talk circulating that the ILWU Local 10 in Oakland is 
expected to vote against the contract. Evidence of this mounted when, on March 
11, the Port of Oakland said on their website, "Oakland International Container 
Terminal has suspended yard and gate operations for the remainder of the day 
shift March 11. The terminal said that it has dismissed longshore workers after 
they refused to work due to a dispute over staffing levels." On March 11, the 
PMA issued a statement saying that "ILWU Local 10 has repeatedly engaged in 
illegal work stoppages at the Port of Oakland, bringing operations to a 
standstill at Oakland International Container Terminal, the largest terminal in 
the Port." The terminal was reopened for business on March 12. Here is the link 
to the PMA press release on March 11: http://goo.gl/jOqd5Y 

   The Port of Oakland also had problems with workers shortly after the 
tentative contract had been negotiated. On Feb. 22, the port experienced some 
labor issues with the day shift, resulting in the suspension of those workers. 
The port's website said while work resumed at the Port of Oakland the evening 
of Saturday, Feb. 21, it continued Sunday morning, but then was suspended for 
the remainder of the day shift. The website said that "The issue is a 
labor-management dispute over break time." The PMA released a statement on Feb. 
22 saying they "will continue to address any future work stoppages by Local 10 
through the grievance and arbitration process, and, if necessary, in court." 
Here is a link to the full PMA press release on Feb. 22: http://goo.gl/AFlO62 

   The Port of Portland is not without its problems either. The International 
Container Terminal Services, Inc. (ICTSI), which operates at Terminal 6 and the 
ILWU, still have "bad blood" between them, according to a comment made by Port 
Executive Director Bill Wyatt to the Oregonian in February. And with the 
departure of Hanjin shipping from the port in March, the port is concerned that 
the ICTSI could follow, although Wyatt doesn't feel it will come to that and 
said that ICTSI is working to entice new business to the Port. Still, relations 
between both parties have been tense for some time and are one of the reasons 
said to have driven Hanjin out of Portland.

   The Oregonian reported on March 10 that "a federal judge ordered the 
national longshoremen union and its Portland chapter to pay nearly $60,000 to 
the National Labor Relations Board for violating a court order to resume normal 
operations at the Port of Portland's Terminal 6." In December 2014, the ILWU 
was found guilty of work slowdowns at the container terminal that went on for 
more than a year. In July of 2012, U.S. District Judge Michael Simon extended 
an order banning slowdowns by ILWU and required longshoremen to comply with his 
order. At that time, Hanjin was staying away from Portland because of the work 
disruptions. Finally, in 2015, the company decided enough was enough and on 
March 9, left Portland for good. 

   TIME FOR A CHANGE?

   There seems to be a consensus forming among shippers that Congress should 
get involved to ensure that U.S. ports don't go through costly slowdowns every 
time a labor contract comes up for renewal. Many exporters would like to see 
Congress remove U.S. ports from under the governing body of the National Labor 
Relations Act (NRLA). At issue is that the NLRA allows for work and labor 
slowdowns, which has happened during contract negotiations. Exporters would 
like to see the U.S. ports have a new "boss": the Railway Labor Act (RLA), 
which currently governs airlines and railroads. The general purpose of the RLA 
is "to avoid any interruption to commerce or to the operation of any carrier 
engaged therein" and to "provide for the prompt and orderly settlement of all 
disputes concerning rates of pay, rules, or working conditions," among other 
things. Here is the link to the full text of the RLA: 
http://railwaylaboract.com/RLA.htm 

   Mike Hajny, vice president of Wesco International, Inc. Ellensburg, 
Washington, told DTN in an email that he agrees that ports should be subject to 
the Railway Labor Act. He said, "While the ILWU should continue to be free to 
negotiate whatever labor contract they feel is justified, they should never 
again be permitted to shut down our ports. They need to be subject to the 
Railway Labor Act -- and 2015 should be the last time that we ever have to 
suffer through an ILWU port shut-down again."

   Hajny told DTN that Wesco has been exporting hay since 1971, and together 
with the farmers, vendors, and suppliers they work with, have faced many 
challenges over the years. "Whether it's untimely rain at harvest time, or 
drought, or sudden changes in exchange rates or oil prices, we're used to the 
ups and downs of agriculture in the international marketplace. What we're not 
used to, however, and what we have no way to prepare for or defend against is 
the devastating harm caused when the ILWU holds our access to international 
transportation hostage in their periodic contract negotiations with the PMA."

   "In terms of gross sales lost during the 11/1/14-2/23/15 ILWU slowdown, 
Wesco's sales were down $6,500,000 when compared to the same period the 
previous year." Hajny said. "But the real, personal toll of the slowdown came 
in the paychecks of our 65 employees who had their overtime eliminated just as 
they were going into the Christmas season. Real working people lost wages, real 
farmers lost the full value of their harvest, and thousands upon thousands of 
eastern Washington families had to worry about their financial futures, while a 
couple hundred cynical ILWU members in Seattle and Tacoma played chicken with 
the PMA over their $140,000-plus salaries, $80,000 pensions, and who was going 
to pay the payroll taxes on their $35,000-a-year Cadillac medical insurance 
policies."

   Hajny added, "We really, really need the help of our local and federal 
legislators to protect the economy of eastern Washington and the livelihoods of 
so many people by making it impossible for the public infrastructure of the 
ports of Seattle and Tacoma to be hijacked by the narrow, self-serving 
interests of such a small group of people."

   Mary Kennedy can be reached at mary.kennedy@dtn.com  

   Follow Mary Kennedy on Twitter @MaryCKenn

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Overheard at NGFA

    Planting prospects, corn quality concerns, how to handle the closing of the 
pit trade -- just a few of the conversations I overheard at this year's 
National Grain and Feed Association annual convention in San Antonio. At 
meetings like these, some topics are hot potatoes tossed around everywhere you 
turn, like transportation and agriculture's revamped relationship with the 
Commodity Futures Trading Commission. Others are just sparks, things overheard 
here or there, left to smolder where they were spoken. 

   My notebook filled up with these little gems. 

   -- Any large shifts from corn to soybeans seems like they will be regional. 
In northwest Iowa and parts of Minnesota, one elevator manager said he could 
see a 3% to 7% shift away from corn this year depending on spring weather, but 
it will mostly come from ground that's been in corn-on-corn production for many 
years. Near Aberdeen, South Dakota, one manager said farmers are asking about a 
variety of smaller crops like sunflowers and barley. There were some reports of 
wheat being ripped up in Southern Illinois. Gentlemen from the Texas panhandle 
said the wheat crop there is in the best shape it's been in for the last few 
years, and that farmers are starting to pull their cattle off. Other parts of 
Texas reported increased competition from milo. 

   -- Many elevator managers said they see farmers mostly sticking to their 
rotations unless spring weather dictates they do something else, but they also 
added that agronomy sales are lagging their usual pace. Sales of P and K 
(phosphorous and potassium) are lagging in many parts of Corn Belt, and farmers 
seem content to let the fertility they've built up in the soil during the boom 
years carry them through this season. They also noted farmers are purchasing 
more non-GMO corn seed and seed varieties with one or two fewer stacked traits 
to try and save on input costs. Elevators expressed concern that this could 
lead to lower yields. 

   -- Corn quality varies by region. In Nebraska, South Dakota and parts of the 
Northern Plains, harvest was dry and swift. Corn in those areas is coming out 
of the bin a little dry, but in areas like Ohio and Michigan the story couldn't 
be more different. Much of the corn was put up wet, and dryers are still 
running. And in Missouri, the manager of one elevator said they've started to 
notice an odor on corn from storage bags. He thinks farmers have about 15 days 
to empty them before quality becomes a problem. 

   -- Farmers are still holding a lot of grain on the farm, and many of the 
country elevator committee board members said they think it could be as high as 
50%. Many are preparing for a "second harvest," when a new flood of grain comes 
to the market. In the meantime, they're busy picking up and shipping the corn 
stored in ground piles before it gets too hot. 

   -- CME Group is sorting through the details of how to transition to an 
electronic-only market. NGFA's risk management committee seemed to have two 
large concerns: how CME would handle certain types of market orders than can 
only be executed by brokers on the floor, and how they'd structure the short 
post-close session that allows traders to even up their books. Market-on-close 
orders seemed to get the most discussion. Usually a broker makes these trades 
as close to the close as possible, and currently, there's no way to do it 
electronically. CME suggested the trade-at-settlement order type, which is 
commonly used in the energy markets, might be a solution. The committee 
responded cautiously and said CME has a lot of education to do because there 
are subtle differences between the order types. CME is also seeking input on 
how long its post-close trading session should be and what kinds of parameters 
it should operate under.  

   -- High frequency trading was as hot a topic as ever. One member of the risk 
management committee expressed frustration that his questions on how HFT 
trading affected the market have gone unanswered by the CME group. CME 
responded by saying it's close to launching its "Myths Project," which will 
answer many of the industry's questions. CFTC Chairman Timothy Massad said the 
regulator wants to study the role HFT trading plays in the derivatives markets; 
however, the agency's inadequate funding has caused long delays. In other HFT 
related talk, an interesting lawsuit was filed earlier this month accusing a 
"John Doe" HFT trading firm of spoofing the treasuries market. The suit was 
filed by the brokerage firm where the president of the National Futures 
Association works, and aims to make CME Group disclose the name of the firm 
that in violation. You can read more details on that case here: 
http://bit.ly/1FyN8Gj. 

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Ice in Upper Mississippi River Melting; Ice Jams a Danger 

    

OMAHA (DTN) -- Warmer weather is allowing ice on northern portions of U.S. 
inland waterways to melt and break up, leading to warnings of ice jams on major 
river shipping routes.    On March 10, the National Weather Service (NWS) 
released its north-central river forecast for the Mississippi and Illinois 
rivers and said ice had thickened in the north the prior week. It was beginning 
to break up and head south, and along with melting snow, stream flows were 
increasing. NWS warned that ice jams were a strong possibility until all the 
ice cleared out. The agency said that the heaviest ice indicted by a MODIS 
satellite imagery was at Lock and Dam 3 (LD) through LD15. Ice measured in that 
area ranged from 90% to 100% coverage with ice ranging from 5 to 19 inches 
thick.

   The U.S. Army Corps of Engineers (USACE), St. Paul District, had hoped to 
reopen Lock and Dam 5A, near Fountain City, Wisconsin, on March 9, but thick 
ice conditions indicated that navigation will not begin on the Upper 
Mississippi River until later than originally anticipated. The USACE is hoping 
to open LD5A no later than March 23. The lock and dam was closed for renovation 
and maintenance on Dec. 1, 2014. The lock was dewatered to perform the work in 
order to repair concrete: repair, sandblast and paint the miter gates and 
replace the bubbler system. This extensive work occurs about every 15-20 years 
on each of the district's lock and dams from Upper St. Anthony Falls Lock and 
Dam in Minneapolis to Lock and Dam 10 in Guttenberg, Iowa. 

   The ice measurements at Lake Pepin on March 11 showed a slight improvement 
from the prior week, but still are showing ice thickness of 11 to 24 inches. 
Barges will not move through the lake until ice is below 15 inches. In 2014, 
the first barge was not able to move through Lake Pepin until Wednesday, April 
16. The extreme ice thickness on Lake Pepin last winter caused the latest start 
to a navigation season since 1970 (excluding the flooding in 2001). On average, 
the start to the UMR navigation season with the first barge moving on Lake 
Pepin, is March 22.

   Ice on the Illinois River was reported by the NWS to be breaking up and 
coverage was at 30% to 100%. They said the threat of ice jams will likely 
continue for another week. Ice jams can be dangerous to moving barges with 
traffic either slowing or stopping depending on the severity.

   Down river at Cairo, Illinois, flooding from the Ohio River has moved above 
flood stage. The Ohio River crested March 15 at a level not seen since 1997. 
The NWS has said that the melting snow and several rainfalls have caused the 
flooding, and dangerous ice jams from the northern rivers will continue to be a 
hazard. Here is a link to the current level of the Ohio River at Cairo. 
http://water.weather.gov/ahps2/hydrograph.php?wfo=pah&gage=ciri2

   THE ALDER AND HER SISTERS GO TO WORK

   The USCG ice cutter Alder began breaking ice in the Twin Ports of 
Duluth/Superior on March 9. "Right now we are preparing the inbound and 
outbound track for the Duluth-Superior Harbor," Lt. J.G Barton Nanney, the deck 
watch officer, told the Great Lakes Shipping News. "Just getting ready for the 
shipping season, but also just kind of doing a little bit of recon to see how 
bad the ice is out there."

   Nanney said this year is off to a better start. "We're looking at probably 
about 6 inches out here, maybe a foot in some places," he said. "We've seen a 
couple pressure ridges that are a couple feet thick." He reported that there 
were some trouble spots on the lake and that "Whitefish Bay over to the east is 
usually pretty thick, and no one's been over there yet. So that's going to be 
kind of a tell to see how bad it's going to be." He said they will keep working 
on the ice in the Twin Ports harbor and then head farther out onto the lake and 
possibly head to Thunder Bay or Marquette if ordered.

   On Friday, March 13, the USCG began icebreaking operations in the St. Marys 
River in preparation for the 2015 shipping season. The USCG said that the ice 
breaking work will be "conducted by the Mackinaw (Cheboygan, Michigan), 
Biscayne Bay (St. Ignace, Michigan), Mobile Bay (Sturgeon Bay, Wisconsin) and 
Katmai Bay (Sault Ste. Marie, Michigan)." All of these ice cutters will be 
working toward one goal and that is to prepare for the opening of the Soo 
Locks, which were scheduled to re-open March 25. The Soo Locks are located on 
the St. Marys River between Lake Superior and Lake Huron, between the upper 
peninsula of the U.S. state of Michigan and the Canadian province of Ontario.

   In an email sent to DTN on March 13, Ron Johnson, port director in Duluth, 
said, "On March 10 the Seaway opening date of March 27 was pushed back until 
April 2." Once the Laker season opens on the Great Lakes, the start to the 
grain shipping season waits for the first oceangoing vessel, known as a saltie, 
to make it to the Twin Ports after the making a full transit of the 2,342-mile 
Great Lakes-St. Lawrence Seaway. Johnson told DTN that, "Based on some 
conversations with some area port folks there is no official date -- just a 
general estimated date of mid-April for the first saltie arriving 
Duluth-Superior." In 2014, the first saltie did not make it to the Twin Ports 
until May 8 which was the latest opening to the grain shipping season on record.

   On March 15, National Oceanic and Atmospheric Administration reported the 
Great Lakes ice coverage at 63.2% versus 82.8% on March 17, 2015. NOAA said it 
was the highest mark for that late in the season in more than 35 years, and it 
surpassed the previous mid-March high of 75.85% set on March 15, 1978.

   Mary Kennedy can be reached at mary.kennedy@dtn.com 

   Follow Mary Kennedy on Twitter @MaryCKenn

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STB Wants Weekly Railroad Service Reports to Become Permanent

   OMAHA (DTN) -- Several shipping groups and the National Grain and Feed 
Association are among those voicing support for the Surface Transportation 
Board's proposal to require railroads to publicly file various weekly data 
reports pertaining to service performance. 

   On Oct. 8, 2014, the Surface Transportation Board made a decision requiring 
all Class 1 railroads to publicly file weekly data reports to the STB to 
"promote industry-wide transparency, accountability and improvements in rail 
service." 

   DTN reported in January that on Dec. 30, 2014, the STB issued two decisions 
in regard to rail service issues and service issues-performance data. The first 
proposal would require new regulations of permanent weekly reporting by all 
Class 1 railroads and the Chicago Transportation Coordination Office (CTCO). 
The STB is also proposing to make the weekly rail service reports permanent, 
saying that collection of performance data on a weekly basis would allow 
continuity of the current reporting and improve their ability to "identify and 
help resolve future regional or national service disruptions more quickly, 
should they occur." 

   Here is the link to the entire Dec. 30 decision by the STB regarding this 
issue: http://goo.gl/oY9DG8

   The STB required comments on both decisions to be submitted by March 2, 
2015. Reply comments are due by April 29, 2015.

   SHIPPERS WANT MORE REGULATIONS

   The Alliance for Rail Competition and other rail shipper interests (ARC, et 
al.) wrote in their comments that they "commend the STB for its efforts to 
address U.S. rail service issues in recent months. We are convinced that the 
severe problems experienced by rail shippers since 2013 would have been far 
worse if the STB had followed recommendations of BNSF and CP and had taken no 
action." 

   ARC, et al. includes among their members shippers of coal and grain in unit 
trains and shuttle trains of 50 cars or more. "We also represent captive and 
other rail-dependent shippers whose shipments move in volumes of single-car 
shipments or in multiple car shipments of 49 cars or less. These include 
shipments of fertilizer, propane, sand used for fracking (including synthetic 
sand), oil, pipe, and pulse crops (beans, peas, lentils and the like)." 

   "While reports of inadequate service, and resulting adverse impacts, have 
been plentiful, details are lacking because of the STB's focus in its reporting 
requirements on shipments of 50 cars or more." The group told the STB that 
while they mostly approve of the current weekly reporting system, additional 
reporting is needed as to service problems involving shippers that are not able 
to ship in unit or shuttle train volumes of 50 cars or more. Here is the link 
to ARC and 16 shipper organizations comments to the STB: http://goo.gl/HF1gZk

   The National Grain and Feed Association (NGFA), which consists of more than 
1,050 grain, feed, processing, exporting and other grain-related companies 
handling more than 70% of all U.S. grains and oilseeds, "strongly commends the 
STB for proposing to make permanent the reporting of rail service performance."

   In their comments to the STB, NGFA said that "such reporting also will 
assist in building a baseline of factual information on rail service 
performance that can be used as a barometer for comparative analysis by 
carriers, rail customers and the STB itself to evaluate future trends. There is 
no way to accomplish this core objective without having such data being 
collected and compiled on an ongoing basis." Here is a link to the AAR comments 
submitted to the STB: http://goo.gl/u9IjFh

   RAILROADS DISAGREE WITH PROPOSED REGULATIONS

   The Association of American Railroads (AAR), a trade association 
representing the interests of North America's major freight railroads, said; 
"The AAR acknowledges the STB's concerns that led to the 'Notice of Proposed 
Rulemaking,' but respectfully submits that the reporting regulations should not 
be adopted as proposed because they are overbroad and may not be helpful in the 
long run. It is the AAR's position that only macro-level reporting metrics that 
the industry has long been providing voluntarily should be made permanent by 
regulation. In a commitment to improve communications with its customers, the 
railroad industry, except the Canadian Pacific who reports on their own 
website, has already voluntarily published such metrics on a public website 
since 1999." The performance measures are available online at 
http://www.railroadpm.org/

   The AAR suggested that "the STB should carefully balance the practical 
utility of the information it is proposing to require Class 1 railroads to 
report with the burdens that reporting will impose. As a result of that 
analysis, the STB should not make data reporting related to the current service 
recovery permanent, but should instead rely on system-level metrics to identify 
future service disruptions, should they occur." Here is a link to the AAR 
comments submitted to the STB: http://goo.gl/xbQrbF

   The BNSF submitted comments to the STB, which said; "BNSF is concerned by 
pressures the STB faces to add granularity to existing reporting. At various 
points throughout 2014, the STB has received informal and formal requests for 
more specialized reporting of service data, including corridor-specific and 
additional commodity-specific metrics. BNSF remains concerned that requests 
from trade associations and other shipper groups are mistaken attempts to skew 
service in their favor at the expense of shippers of other commodities." 

   "BNSF shippers already have access to significant information about network 
volumes and velocity, as well as robust information about their specific 
shipments on BNSF. Requiring BNSF to provide additional cuts of data at the 
individual commodity level or specific geographic sub-levels on a regular basis 
would be burdensome and counterproductive to BNSF's efforts to address the flow 
issues affecting our network as a whole. Reporting can consume critical 
resources without significant commensurate benefit." Here is a link to the BNSF 
comments submitted to the STB: http://goo.gl/uODsYI

   Service on the BNSF so far in 2015 is flowing much better than at this same 
time one year ago. On March 6, 2014, the BNSF reported that average outstanding 
car orders were at 13,680 and were 19.8 days late. In their service update to 
the STB on March 6, 2015, the BNSF reported that outstanding car orders totaled 
2,569 and average days late were 16.3. In fact, all Class 1 railroads have 
reported improved service at this time versus one year ago.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow Mary Kennedy on Twitter @MaryCKenn

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Great Lakes Nearly 88% Covered in Ice

   OMAHA (DTN) -- Queen Elsa, the star of the Disney movie "Frozen," apparently 
paid a visit to the Great Lakes in February and left them nearly covered in ice.

   As of Feb. 28, the combined Great Lakes were nearing last year's March 6 
total of 92%. Three of the Great Lakes were up to 95% covered. According to the 
Great Lakes Environmental Research Laboratory (GLERL), Lake Erie measured 96% 
coverage, Lake Superior measured 95.3%, Lake Erie was 95.9%, and Lake Huron is 
at 95.82%. Lake Ontario, one of the deepest lakes compared to its surface area, 
has seen ice coverage ranging from 80% last week, to 69.3% on the March 1. Lake 
Michigan is currently at 72.2% ice coverage. The combined total of all the 
Great lakes makes this the second winter in a row that ice coverage exceeded 
80%. 

   George Leshkevich, a physical scientist with the Great Lakes Environmental 
Research Laboratory in Ann Arbor, Mich., was quoted in the Great Lakes and 
Seaway Shipping News saying that, "It's been pretty cold the last few weeks, so 
the lakes have more ice now than at this time last year." He said it was 
unusual to have two years in a row of extensive ice cover compared to previous 
years. He told the Duluth News Tribune that "We're seeing some real difficult 
shipping conditions on Lake Erie, with a lot of ridging in the central and 
south parts of the lake." 

   The severity of ice last year called for convoys of ice breakers to work 
through the ice, and many times the wind would close up the fresh path, causing 
ridges which had to "rammed" by the icebreaker. Overnight, the icebreaker would 
get caught in the ice and end up in the same position it was at 24 hours 
earlier. Leshkevich said that he traveled with the ice breakers in March 2014. 
"It was brutal. I had never seen it like that," he said. "A five-to-seven-day 
trip turned into 16 days."

   According to the USDA GTR, United States and Canadian authorities have 
scheduled the beginning of 2015 navigation season for the Great Lakes-St. 
Lawrence Seaway shipping system for March 27, a day earlier than last year. 
Last year, the first ship didn't pass through there until April 4 because of 
the severe ice coverage. A seaway spokesman said, "Last year when we opened, we 
saw limited activity given how expansive the ice cover was." He added it could 
adjust the opening date if necessary. "We will not open the season until it is 
safe to do so."

   The GLS Shipping News reported that Robert Lewis-Manning, president of the 
Canadian Shipowners Association, which represents ships that move through the 
Great Lakes and St. Lawrence River, said he expects this year's situation to be 
"as bad or worse than it was last year." There is concern that the lack of ice 
breakers may be a problem this year if the ice becomes worse. While the U.S. 
Coast Guard has seven, it relied on help from Canada's two icebreakers that 
were sent from the Artic and may not be readily available this season.

   As for the Port of Duluth, the ice breakers usually begin working on the 
port in early March. Last year, U.S. Coast Guard icebreaker Alder began 
operations March 4. The port's first oceangoing ship (saltie) of the 2014 
commercial shipping season did not arrive until early May 2014. The first 
saltie of the season was escorted in a convoy of ice breakers in order to make 
it to the port safely. Thunder Bay's first saltie arrived in port on April 28. 
The arrival of the salties is the "official" start to the grain-shipping season.

   WEST COAST PORTS RETURNING TO NORMAL?

   Most of the 29 ports affected by the nine-month labor dispute between the 
Pacific Maritime Association (PMA) and the International Longshore and Workers 
Union (ILWU) are almost at full production levels, but still face backlogs as 
they continue to catch up. Work resumed in full on Feb. 21 when both parties 
reached a tentative settlement, which is scheduled to be ratified sometime in 
March, but many believe that the backlogs could take up to three months to 
clear.

   "The challenge is going to be re-earning the trust of the shippers," Mark 
Hirzel, president of the Los Angeles Customs Brokers and Freight Forwarders 
Association, told the Long Beach Press-Telegram. "I know of a very large 
shipper that has moved all their cargo from Los Angeles and Long Beach and have 
sworn they're not coming back again," Hirzel said Friday. On Feb. 6, the Port 
of Long Beach sent DTN a statement by email in which Chief Executive Jon 
Slangerup stated that, "Business has already moved to other ports due to the 
congestion." 

   The Journal of Commerce reported that in a survey of 138 shippers, "65% plan 
to ship less cargo through U.S. West Coast ports this year and in 2016 after 
suffering from congestion delays. The percentage of shippers planning to 
permanently reroute some cargo away from the coast is nearly identical to the 
66% of shippers who said the same thing when they were surveyed by JOC.com in 
mid-December."

   A Midwest container broker told DTN via email, "We don't have a lot of 
options to bypass the West Coast for most of our Asia-bound exports. If I was a 
cotton shipper in Texas or a soybean or other shipper from Ohio or Missouri, I 
sure would be working hard on an East Coast option. Importers have better 
options as they have higher margins on finished goods, and the market for over 
65% of consumer goods is east of the Mississippi."

   He added that in his opinion, "This GOP congress should pass legislation 
making ocean ports equivalent with railroads and airports in terms of strategic 
importance and allowing federal intervention sooner than later." The law 
currently says they can only involve a federal mediator if both sides agree or 
wait for a strike/lockout and then invoke federal rules.

   Fred Klose, executive director of the California Agricultural Export 
Council, told the Press-Telegram, "The trade group hasn't calculated the 
economic hit to farmers caused by the port troubles, but some exporters 
switched to air freight, which caused prices of exported produce to rise in 
Japan. Prices rocketed through the roof; Japan couldn't get the products that 
they needed, so there's a lot of air freight going on."

   Mary Kennedy can be reached at mary.kennedy@dtn.com 
Follow Mary on Twitter @MaryCKenn

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Canadian National Railroad Reaches Last Minute Deal With Unifor

   OMAHA (DTN) -- West Coast dockworkers and their employers reached a 
tentative agreement Friday, according to representatives of both sides. 

   Late afternoon on Friday, Feb. 20, the Pacific Maritime Association (PMA) 
released a joint statement by PMA President James McKenna and International 
Longshore and Warehouse Union (ILWU) President Bob McEllrath, saying: "After 
more than nine months of negotiations, we are pleased to have reached an 
agreement that is good for workers and for the industry. We are also pleased 
that our ports can now resume full operations."

   The tentative agreement on a new five-year contract covering workers at all 
29 West Coast ports was reached with assistance from U.S. Secretary of Labor 
Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot 
Beckenbaugh. The PMA said the parties will not be releasing details of the 
agreement at this time. The agreement is subject to ratification by both 
parties.

   While all the ports resumed operations immediately, the Port of Oakland 
experienced some labor issues with the day shift on Feb. 22, resulting in the 
suspension of those workers. The port's website said while work resumed at the 
Port of Oakland the evening of Saturday, Feb. 21, it continued Sunday morning 
but then was suspended for the remainder of the day shift. "The issue is a 
labor-management dispute over break time. Labor has been requested for the 
Sunday night shift Feb. 22. It remains to be seen if the labor request will be 
filled or if operations will resume. Vessel operations -- with one or two 
exceptions -- will be suspended again Monday, Feb. 23." 

   The PMA issued a statement on the port's website saying: "An area arbitrator 
ruled that longshoremen affiliated with Local 10 of the ILWU conducted illegal 
work stoppages at the Port of Oakland, resulting in port operations being shut 
down during today's day shift. We will continue to address any future work 
stoppages by Local 10 through the grievance and arbitration process, and, if 
necessary, in court. It's hoped that the dispute will be settled in arbitration 
Monday." 

   Late Sunday evening, the port issued another statement saying "vessel 
operations have resumed this evening at the Port of Oakland. Five vessels are 
being loaded and unloaded. Another three are scheduled for operations. Some 
requested jobs have gone unfilled."

   The Journal of Commerce said, "The tentative coast-wide contract agreement 
that was reached Friday evening by the International Longshore and Warehouse 
Union and the Pacific Maritime Association is just the beginning of a long 
process West Coast ports must endure to recover from the backlog of containers 
and vessels, and to restore trust among shippers." A Midwest container shipper 
told DTN via email it will "take months to sort this mess out."

   CANADIAN NATIONAL RAILWAY, UNIFOR AT IMPASSE IN NEGOTIATIONS

   On Feb. 18, the Canadian National Railway Company (CN) announced on their 
website "locomotive engineers and conductors working on the company's Northern 
Quebec Internal Short line ratified a new collective agreement. The employees 
are represented by the Teamsters Canada Rail Conference (TCRC) union." The 
four-year agreement provides wage increases and benefit improvements to 93 
employees.

   However, another union, Unifor, which represents approximately 4,800 CN 
employees in mechanical, intermodal, clerical and other areas of the company's 
business in Canada has rejected the latest offer by the CN. Labor negotiations 
with Unifor have been going on for almost six months, and on Friday, the talks 
came to an impasse. Late Friday afternoon, the CN issued a press release urging 
the union to accept binding arbitration as "the best way to settle their 
outstanding contractual differences. Barring such an agreement over the 
weekend, CN will exercise its right under the Canada Labour Code to lockout 
Unifor's 4,800 members at CN at 2,300 hours, Monday, Feb. 23."

   As social media began to "throw stones" over the issue late Friday, @CN_Comm 
released a statement on Twitter saying, "To be clear, CN is not locking out 
@UniforTheUnion members yet. We are urging union leadership to sit down and 
negotiate a deal this weekend."  

   On Feb. 21, the CN issued another press release saying it was "disappointed 
with Unifor's recent claims that the company is not bargaining in good faith 
and is trying to force its agenda on the union through a lockout of the union's 
4,800 members."

   "If Unifor believes it is advocating the right deal pattern, then the proper 
forum to get a fair hearing for such a deal pattern is binding arbitration. An 
independent arbitrator can consider all the facts impartially and decide in 
fairness what terms are most in line with the interests of CN employees 
represented by Unifor." Here is a link to the entire Feb. 21 press release: 
http://goo.gl/fyGXT4

   The two sides did get together on Sunday, Feb. 22, for several hours in 
Ottawa with officials of the government's Federal Conciliation and Mediation 
Service, but were unable to negotiate all terms of a new contract. However, the 
two parties will meet again Monday, Feb. 23, morning in Ottawa to resume 
collective bargaining.

   In a press release late Sunday, the CN said: "In the absence of a negotiated 
settlement or agreement on binding arbitration by Monday evening, CN will 
deploy its labor contingency plan, with trained management personnel safely 
performing the work of Unifor members, to protect service to the best of its 
ability. CN has begun to advise its customers in Canada of that possibility."

   On Monday, Feb 23 with the deadline approaching, the CN negotiated a 
tentative labor agreement with Unifor. In a press release on their website, 
they said, "As a result, CN has withdrawn its lockout notice to Unifor, which 
would have come effective at 2300 hours local time tonight in the absence of a 
settlement. Details of the tentative agreement are being withheld pending 
ratification by Unifor members. The union is expected to announce the results 
of the ratification vote in the next three weeks."

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow Mary on Twitter @MaryCKenn

    

******************************************************************************
White House Sending U.S. Labor Secretary Perez to Referee Port Disputes

   OMAHA (DTN) -- Talks between West Coast dock workers and employers have 
stalled and the White House will be sending U.S. Labor Secretary Thomas Perez 
to referee the disagreement. However, some industry watchers say it's too late 
as some shippers make plans to move away from West Coast ports to other venues.

   Union workers are suspected of launching deliberate work slowdowns at West 
Coast ports and on Feb. 11, the employers' group, the Pacific Maritime 
Association (PMA), announced suspension of four days of premium-pay weekend and 
holiday vessel operations -- Feb. 12 (Lincoln's Birthday); Feb. 14; 'Feb 15; 
and Feb 16 (Washington's Birthday). 

   Here is the link to the entire PMA press release: http://goo.gl/JlUibA

   Robert McEllrath, president of the International Longshore and Warehouse 
Union (ILWU), told the New York Times the employers were deliberately making 
the congestion crisis worse to gain leverage at the bargaining table.

   PMA spokesman Wade Gates said, "Last week, PMA made a comprehensive contract 
offer designed to bring these talks to conclusion. The ILWU responded with 
demands they knew we could not meet, and continued slowdowns that will soon 
bring West Coast ports to gridlock. What they're doing amounts to a strike with 
pay, and we will reduce the extent to which we pay premium rates for such a 
strike."

   According to the PMA press release, one of biggest issues right now is a 
demand by the union to have the right to fire any arbitrator who rules against 
them at the end of each contract period, even though those arbitrators are the 
mediators who keep West Coast ports operating smoothly. The PMA said that, 
"During the 2008-2014 contract period, the four area arbitrators found the ILWU 
guilty of more than 200 slowdowns or work stoppages." The PMA said allowing 
this demand to be met could "cripple the West Coast waterfront."

   A Midwest container broker with customers on the West Coast told DTN on 
Friday, "The situation is now unsustainable; there will either be a 
breakthrough and a tentative agreement which will keep in place the current 
situation until ratified and signed. Even still, once the Union starts working 
at full capacity it will take three to four months to clean up the mess. Or, 
there will be a strike or lockout, then after a week Taft Hartley will be 
invoked, forcing them to go back to work and negotiate, which will get us back 
to the current stalemate essentially until they work something out.

   "In my opinion," he said, "the ILWU realizes that importers will be using 
the West Coast less in the future due to the increase in Canadian port 
productivity, more direct via Suez shipping to East and Gulf Coast -- 65% of 
the consumer market is east of the Mississippi I think, if not more -- the 
wider Panama, and the new Mexican port and rail connections. I think they are 
going for it all now as they know the long-term outlook for the West Coast work 
load is not good." 

   One sign of that became apparent on Feb. 10 when Hanjin Shipping Co. 
withdrew officially from the Port of Portland saying their last day will be 
March 4. According to The Oregonian, shipping companies that work with Hanjin 
received a letter saying Portland had been dropped as a stop for container 
ships and Portland would only be serviced by truck and rail via the Seattle 
port. The Oregonian noted that Hanjin ships account for 78% of the business at 
Terminal 6, moving 1,600 containers per week. Those shipments moved most Oregon 
agricultural exports to Asia, and brought apparel for Northwest-based companies 
like Nike and Columbia Sportswear in and out of the country and generated $83 
million annually.

   In a Feb. 11 article, the Associated Press reported that Hanjin's pullout 
isn't a surprise. In recent years, the company has been unhappy about the pace 
of work among longshore workers and announced its intention to withdraw two 
years ago. "If you are in Portland you should know why. Can't afford the 
expense of operating there. Simple," said Mike Radak, senior vice president for 
Hanjin USA.

   Late Saturday evening on Feb. 14, the Wall Street Journal reported the White 
House said it would intervene in stalled labor talks at West Coast ports, 
sending the labor secretary to meet with both parties and urge them to complete 
a new contract and avoid further slowdowns. "Out of concern for the economic 
consequences of further delay, the president has directed Secretary of Labor 
Tom Perez to travel to California to meet with the parties to urge them to 
resolve their dispute quickly at the bargaining table," White House spokesman 
Eric Schultz said in a statement. 

   There are some who feel that the White House has good intentions, but it may 
be too late to solve the differences between the two groups. The National 
Retail Federation told the WSJ it hopes Perez can recommit the two sides to 
reaching a deal. "The slowdowns, congestion and suspensions at the West Coast 
ports need to end now."

   MIXED RESULTS IN CANADA'S CP, CN RAILROAD LABOR NEGOTIATIONS

   The Canadian National (CN) railroad went into this weekend facing potential 
strike action from two unions representing the company's employees. DTN 
Canadian Grain Analyst Cliff Jamieson said thanks to an agreement with Unifor, 
the union representing about 1,800 CN safety and maintenance workers was struck 
just prior to the deadline. "CN Rail reports that a tentative agreement has 
been reached between that company and the Teamsters union, with will be voted 
on in April and negotiations with Unifor continue," said Jamieson.

   "At the same time, a deal between the Canadian Pacific (CP) and the 
Teamsters Canada Rail Conference was not reached, which meant that 
approximately 3,300 engineers and train workers went on strike as of 12:01 a.m. 
on Sunday morning." Jamieson added, "The strike may not be a long one. On 
Friday, the Canadian government paved the way for introduction of back-to-work 
legislation that will likely be introduced on Monday. The Globe and Mail 
reports that the last time CP workers walked off the job in 2012 estimates 
pegged the potential damage to the Canadian economy at $540 million/week. The 
current strike will see close to 20,000 commuters impacted on three commuter 
lines in Montreal which will place further pressure on government to intercede."

   "The current labor dispute comes at a time when both railroads are behind in 
spotting cars for grain movement. The most recent statistics suggest both 
railroads were behind 17,701 cars as of week 24, or the week ending January 18. 
Of this total, 7,732 cars are CN, while a further 9,969 cars are CP. This 
volume represents 10% of total demand with 46% of this total have been 
outstanding for more than four weeks."

   Mary Kennedy can be reached at mary.kennedy@dtn.com 

   Follow Mary on Twitter @MaryCKenn

******************************************************************************
"Do or Die" for West Coast Labor Talks 

   OMAHA (DTN) -- In an effort to end the nine-month-long contract dispute with 
the International Longshore and Warehouse Union (ILWU), the Pacific Maritime 
Association (PMA) announced Feb. 4 that they had made an "all-in" contract 
offer that would significantly increase compensation to the members of the ILWU.

   "Our members have shown tremendous restraint in the face of ILWU slowdowns 
that have cut productivity by as much as 30, 40, even 50%," PMA President Jim 
McKenna stated in a press release. "This offer puts us all-in as we seek to 
wrap up these contract talks and return our ports to normal operations." 
McKenna told Associated Press that he wants to avoid a coast-wide port 
shutdown, but employers won't keep paying workers who aren't moving cargo at 
their normal rate if the ports become much more gridlocked.

   The Wall Street Journal reported that on Feb. 5, the ILWU circulated photos 
of empty yards at the ports. ILWU President Robert McEllrath said in a 
statement accompanying the photos, "PMA is leaving ships at sea and claiming 
there's no space on the docks, but there are acres of asphalt just waiting for 
the containers on those ships, and hundreds of longshore workers ready to 
unload them."

   Late Friday, Feb. 6, the PMA announced that weekend vessel loading and 
unloading operations would be temporarily suspended over the weekend at all 29 
West Coast ports. They said that yard, rail and gate operations were continuing 
at terminal operators' discretion.

   The PMA said that vessel operations are scheduled to resume Monday, Feb. 9. 
"Yard operations -- that is, moving processed containers for truck and rail 
delivery to customers -- will continue at terminal operators' discretion, 
although the ILWU continues to limit operations by withholding the needed crane 
operators or operating slowly."

   In a press release received by DTN from the Port of Long Beach, Port of Long 
Beach Chief Executive Jon Slangerup issued the following statement on the labor 
issue: "The Port of Long Beach isn't a direct party to the negotiations, but we 
again urge the PMA and ILWU to quickly resolve their differences so all the 
West Coast ports can focus on clearing the growing backlog of cargo."

   "The PMA and ILWU are vital partners in an industry that here in Southern 
California employs more than 500,000 workers -- in and outside the ports. 

   "Business has already moved to other ports due to the congestion. It's 
critical that we stop the hemorrhaging. This region simply can't afford to lose 
jobs because of cargo heading elsewhere."

   The Port of Los Angeles Executive Director Gene Seroka told the Wall Street 
Journal that containers are stacked about six high at the Port of Los Angeles. 
"If a labor deal is reached and other solutions are implemented, it could take 
about eight weeks to get the port back to normal," he said.

   In the meantime, refrigerated beef and pork, poultry, apples, frozen and 
dehydrated potato products and frozen vegetables wait for shipment in the hope 
there is no spoilage. The delays to shipping those products and more are 
costing industries hundreds of millions of dollars in lost sales, according to 
news reports. A container shipper in the Upper Midwest told DTN that fresh 
produce waiting for shipment late last year did spoil and had to be destroyed.

   Shippers who move containers of ag products from the Midwest are frustrated 
and have told DTN that their businesses are at risk of losing key customers 
because of the ongoing dispute. One shipper told DTN that he is angry and feels 
helpless that there is nothing he can do but watch and wait and lose customers.

   The Seattle Times reported that stakeholders in port operations have been 
pleading for President Barack Obama to step in since port slowdowns first 
started in late October 2014. After Friday's announcement, the Times said that 
"politicians and associations across the country urged for the president to 
step in."

   The administration's only statement on the issue came at the end of November 
2014 when the president said he was confident both sides could reach a deal 
"through the time-tested process of collective bargaining."

   The PMA noted that despite four weeks of help by a federal mediator, the 
parties have not yet been able to "bridge the considerable gaps between them." 
On top of that, the union recently added significant new demands, with the most 
significant being that the union wants to change the decades-long process for 
selecting arbitrators. The PMA said the union is "trying to change the rules on 
the waterfront in their favor, giving them the ability to unilaterally remove 
arbitrators who rule against them." 

   McKenna, speaking at a news conference said that without the arbitration 
process in place, the ILWU would call the shots and employers would be 
powerless to stop the slowdowns. "Some might wonder how the union was able to 
take such unilateral actions to cripple the West Coast ports. The short answer 
is, because they can," he said.

   Here is a link to the entire press release and PMA offer: 
http://goo.gl/zSiui1

   Mary Kennedy can be reached at mary.kennedy@dtn.com 
Follow Mary Kennedy on Twitter @MaryCKenn

******************************************************************************
A Pensive Moment in the History of Pit Trade

   The trading pits are about people. They can be emotional, brash, full of 
fury and glory. They're a noisy, rambunctious fraternity in octagonal 
organization, or so I've been told. The movie "Trading Places" is older than I 
am, and by the time I started writing about agriculture, electronic trade had 
already become the norm. And while I didn't witness pit trading at its height, 
I love hearing the stories people have to tell. It's an end of an era I barely 
knew, yet I appreciate its loss because of the stories I've heard. 

   It's sad to say that everyone saw it coming. Sooner or later, the pits would 
close. But now that we know most trading pits in Chicago and New York will go 
dark on July 2, it's like we just put open outcry trade in hospice care. No 
matter how prepared we were for this moment, it was bound to provoke pensive 
thoughts and a walk down memory lane. It's simply how people process knowing 
they're going to lose something special, regardless of whether it's a loved one 
or a storied institution. 

   Perhaps one of the most honest reflections of this moment is from Jeffrey 
Carter, an independent trader, angel investor and former member of the CME's 
board of directors. With his permission, we're rerunning several excerpts from 
his recent blog post, "The End of the Pits," unedited. You can read the entire 
post here:  http://bit.ly/18SbP40. Please feel free to share your stories and 
thoughts in the comments section. 

   Excerpt One: 

   To those that don't know the business, the trading floor is the cultural 
heart and soul of an exchange. It's the beating heart.

   But, used correctly, the trading floor is also the brain. It's also the 
ethos, and the morality of an exchange.

   Of course, today most of the market is on the screen and electrified.

   Some people love electronic markets. Some hate them. What I will tell you is 
they aren't better or worse, but they are different.  That's not "good" or 
"bad" in a moral sense. They are just different.

   There are some realities that one has to grasp when looking at the trading 
business.

   First, the power brokers in New York (Big banks) have always hated Chicago. 
Prior to 1972, Chicago was small potatoes. Post the introduction of financial 
futures, Chicago was an international powerhouse. New York guys were jealous 
because they didn't think of it. They were pissed because a few thousand guys 
that didn't have prep school/fancy college degrees were beating the pants off 
them in the market every single day.

   Post demutualization, the power brokers were able to exert their influence 
over CME corporate structure to give artificial advantages to people that were 
not necessarily members of the exchange. Co-location, fee breaks, other perks.

   Some will say this was purely a fight between an old way of doing things, 
open outcry, and a new way of doing things, electronic trading. They aren't 
really correct. The members of the exchange voted to take the first two 
contracts of Eurodollars electronic under competitive threats from Eurex back 
in 2001. It took a few years before the entire contract made the jump to the 
screen. But, in fairness, CME marketing people were out on the street actively 
telling customers to go to the screen rather than the pit.

   The pit not only had advantages for traders, but many customers were 
advantaged by the pit too. You can't bitch about a fill on the screen and get 
it adjusted. You can't use a "tick" on the screen. There are no fat fingers in 
a trading pit.

   Excerpt Two:

   The floor was the place for dreamers. It was the place for entrepreneurs, 
because that's what independent traders really were. It was a place where a guy 
that never graduated from high school but had his wits about him, and a high 
appetite for risk could make a living. Some even got rich.

   The floor was a place for everyone and anyone. It was like America, 
democratic. All walks of life. All you needed was enough money to rent a seat 
and you were a trader. No special qualification or certification. No degree. 
Sure, there were cliques. It was clubby. Not everyone was ethical. Not everyone 
liked everyone else. There were fights. But, the floor reminds me of startup 
companies today.

   The floor was a constant vaudeville show. Colorful. Frenzied. Loud. Smelly. 
Smoky. It was on the run entertainment from 5AM to 4PM. Every day. Tourists 
would come like the zoo, stand behind thick panes of glass and point at the 
animals.

   The floor was an economic engine that built all of the cultural institutions 
in Chicago. All of them. They have roots in the floor. The banks that line 
LaSalle Street are here for one reason. Chicago would be nothing without its 
exchanges.  Fortunately we made the right choices in the late 1990's and 
Chicago still has its exchanges. The city and state would be in even worse 
shape without them.

   But maybe most of all, the floor was about hope. It was a place where you 
could realize some of your wildest dreams. You could go from electrician, cop, 
milk man, farmer, military, to wealthy trader. I think hope still exists on 
screens, but it's a lot different. Hope always works better when there are 
other people next to you supporting you.

   Today, it's almost impossible to start out as an independent trader on a 
screen and make it. If you want to really compete and become a high frequency 
trader, the startup costs are just too high. Frankly, to be an HFT trader, you 
better be a very skilled programmer and probability theorist as well-and be 
able to take some risk. The barriers to entry on trading are much higher today 
than they were back when I started.

   I left the floor a few years ago. I finally sold my last seat last year. So, 
I am not a shareholder, or a member of CME. But, I still have friends there 
that I think of. Even guys that I haven't spoken to in years. Some of the old 
Eurodollar ($GE_F) guys, the Hog ($HE_F) guys, and just people you'd see 
everyday.  The truth is, if you were a real trader and spent a long time there, 
a piece of the floor is always in you-and a piece of you will always be in the 
floor whether it's open or not. I am trying to start a new venture. Maybe old 
floor traders want to chat about it?

   When traders meet on the street, there is an instant comfort.  Floor trading 
had a code. Floor traders engaging in the "real world" have learned that the 
rest of the world doesn't live by that code. That's why lawyers stay in 
business.

   It's not a sad day that the floor is closing. What's sad is that the dynamic 
innovative energy from the floor isn't concentrated anywhere else. When you get 
a group of 3000 risk takers in one room, stuff happens. A lot of it fails, but 
a lot of it is quite successful. Remember, we had three trading floors full of 
crazies in Chicago. Not only things inside the exchange, but businesses outside 
the exchange too. The floor created a ton of value outside of trading. It was 
the greatest social network in the world. It was the original co-working space. 
 

******************************************************************************
Labor Dispute Gets Meaty

   By now, farmers are no strangers to labor disputes and disruption they cause 
in getting goods to the end user. But that doesn't mean it's any less 
frustrating or annoying. 

   A prolonged standoff between grain terminals and longshore workers in the 
Pacific Northwest simmered for years before it got so tense it scared off the 
grain inspectors. Shortly after and under political pressure, both sides 
reached a resolution. 

   Now the issue is with the large container ports on the West Coast, primarily 
in California. In short: The International Longshore Warehouse Union 
(represents workers at the ports) and the Pacific Maritime Association 
(represents 72 companies including terminal operators and cargo carriers) are 
negotiating a new contract. They've been at it for nine months without reaching 
a deal and have brought in a federal mediator. 

   The pace of shipments has slowed, goods are backing up at the ports, 
congestion is growing and the ramifications are being felt across the supply 
chain. On Monday, 80 Congressmen sent their third letter to both parties urging 
them to come to an agreement, but there's really nothing else Congress can do, 
a recent article in the Journal of Commerce (http://bit.ly/16ewZaH).

   More than 90 agriculture groups have also petitioned the two groups to come 
to an agreement in a letter of their own.

   "This regrettable situation is having a severe impact on our ability to 
export agricultural and food products to many of our main export markets," 
wrote the groups in the letter. "Inevitably, these overseas customers will look 
to other sources for their supply of these goods. Similar to what we 
encountered after ill-advised export embargoes in the past, once lost, a 
foreign customer can be difficult to recapture."

   A University of Missouri Extension economist warned that the slowdown could 
significantly affect meat exports, particularly to Japan. 

   "We exported about 21 percent of the pork, 10 percent of the beef and 19 
percent of the chicken produced last year," said Ron Plain, the economist. "In 
total, over $5 billion worth of meats went out through those ports last year. 
At the rate we're going, not near that amount is going to get shipped this 
year."

   Most of U.S. beef exports to Japan ship as the fresh, chilled variety. With 
the back up at the port, much of that beef will need to be frozen to keep it 
from spoiling, and Plain said that means a large dockage in its value. And if 
the U.S. can't meet the needs of Pacific Rim customers quickly enough, they may 
turn to other sources. 

   The port situation has also resulted in shortage of rail cars and 
refrigerated trucks, Plain said. There's also reluctance on the part of meat 
companies to send meat to the coast for shipping. "It is impacting the revenue 
that comes to packing plants, and therefore impacting what packing plants are 
willing to bid on livestock for slaughter."

   Plain noted the port dispute may also affect nut and cotton exports.

   "Even once an agreement is reached, it will take quite some time before 
backlogged product can be moved through those ports and we can get back to the 
normal shipping time."

******************************************************************************


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