Intermodalization, Globalization, and the Potential Downfall of the International Longshore and Warehouse Union

Prior to the passage of the North American Free Trade Agreement (NAFTA-1994/2008) the Mexican government opened up real estate to American and Asian producers. Across its northern bordertowns, from Tijuana south of California, and Nogales alongside its namesake in Arizona, to Juarez across from El Paso and beyond to the Gulf Coast, manufacturers like Toshiba, 3M, Johnson and Johnson, Ford, and Hewlett-Packard, amongst many, many others from this and other countries have moved their operations. From car parts and clothes to televisions and household appliances, the jobs that initially supported a large portion of the American middle class and instilled pride for two generations, more like one and a little more really, are gone.

In this latest "recession" alone, manufacturing has taken a substantial hit, with a large percentage of job losses in this sector. Media sources, corporate, government, and otherwise all agree that these jobs will not be returning....hidden by the smoke screen of real estate reports in my opinion...but back to the point here...

There are numerous reasons why millions of people have been streaming to this northern region of Mexico. This area of the country has been minimally populated for millenia, but business investment spurred by the guarantee of cheap, abundant, weak, and pliable labor has rapidly changed that over the past two decades.

NAFTA opened the door to the free movement of goods and capital across the borders of Mexico, Canada, and the United States, all except for a few key items,

"NAFTA improves incentives for buying within the North American region and ensures that North American producers receive the primary benefits of all newly established tariff preferences. Goods not originating from the United States, Mexico, or Canada must be significantly transformed or processed in one of those countries before they receive NAFTA's lower duties for shipment to one of the two other countries" (usda.gov).

Trade imbalances between Mexico and the United States are a key piece of their relationship throughout history, but through NAFTA the undermining of the Mexican agricultural economy was an imporant part of stirring up the workforce that the border-maquiladoras were waiting for, "In the years immediately prior to NAFTA, U.S. agricultural products lost market share in Mexico as competition for the Mexican market increased. NAFTA reversed this trend. The United States supplied more than 72 percent of Mexico's total agricultural imports in 2007, due in part to the price advantage and preferential access that U.S. products now enjoy" (usda.gov).

This diverts jobs away from the United States, and enables multinational and other corporations to offshore their own manufacturing to Mexico. While this has all been typically in lower level manufacturing in the north, in recent years this trend has reached into the high-tech sector, and also to the south, in cities like Guadalajara, the Mexican "Silicon Valley."

Named after Benito Juarez, the hero-president who first truly pushed back the European monopolies on church, state, and economy in the former Spanish colony in the mid/late Nineteenth century, Ciudad Juarez is plagued by law-enforcement corruption, inhuman working and living conditions, and is the epicenter of feminicide in North America, and potentially across the entire Western Hemisphere. Standing in bitter contrast to the example personified by Benito, foreign influence, especially the economic domination from the United States, is turning Mexico into a veritable hell on earth for workers, especially for females.

For many manufacturers, packers, and warehousers prefer women laborers to men. For facilities across the United States and Mexico, the size of the average woman's hands and the belief that women can stay focused and work more dilligently than men fuel hiring trends and resulting labor migration patterns (Bonacich).

Instead of men coming north to work in mines, construction projects, or as field workers both in Mexico and the United States while leaving their families behind, now it is women who take on this journey, the corresponding dangers and risks, as well as pay the ultimate price so that Americans could believe that the prices they in turn pay at Walmart and elsewhere are well deserved as opposed to symbols of social-political-and economic injustice,

"More than 420 girls and women have been killed in Juárez in the past eleven years. Mexican and U.S. criminologists speculate that as many as 90 of those were victims of one or more serial killers.The serial victims bore similar traits. They were young and slender and had brown complexions and long hair. All came from poor families, and many were lured to Juárez by job prospects at maquiladoras. Their poverty, experts say, made them vulnerable. Many of them were raped and mutilated, their bodies dumped in ditches or vacant lots" (mujeresdejuarez.org).

On a new front, Mexico is increasingly becoming a destination for logistics businesses. As Guy Slim and other private investors oversee the construction of Asia-facing ports and America-bound rail lines, new Juarez-esq towns are and will continue to develop..

Ultimately this pattern of globalization, combined with the ongoing threat that the unrestrained technological revolution and the War on Terror pose, will potentially undermine what is left of the International Longshore and Warehouse Union, one of the key backbone labor organizations in the United States.

The developmental history of recent trans-oceanic logistics can be related as a series of technological breakthroughs or “revolutions.” Goods in the past were hoisted on and off of ships by raw man-power. Called "break-bulk" cargoes were not uniformly packed, which meant that ships would have to be carefully packed in order to standardize water distribution (ballasting) for the vessel, but also to stow as much as possible.

Dockwork during this period was very labor intensive, demanding large pools of potential workers in order to keep a management friendly cost balance for the laborers actually doing the work. Four innovations over the bast fifty years have completely altered how goods are carried, and how ports and ships themselves relate to one another.

The first evolutionary step was the container ship, which revolutionized the ship-to-shore transfer process. No more would boxes, crates, and barrels of various types be hoisted aboard ships in nets. Standardized trailers/containers instead store all these assorted items. These containers are efficiently stacked, maximizing payload, organizing shipments, and enabling for quick movement of cargo from ships to waiting trucks on the docks;

Second was the extension of containerization to encompass the entire door-to-door transport chain. Closed circuits of trailers, from port to distribution center and back, and then from the distribution centers to the outer networks of shipment simplified and economized the flow of goods. Based off container innovation distribution centers were reshaped as well. Trailers filled with palletized items can be quickly unloaded, broken down, and reloaded into another trailer located on the opposite side of the building, a process called "cross-docking."

The third revolution was the extensive use of intermodal rail on a dock. An example of this can be seen at Pier 400 at the Port of Los Angeles. Alongside the berthing (docking) area for ships run rail lines. Instead of trucks lining up alongside the ship and having a container loaded on a waiting trailer frame that has to be driven to the railyards further inland to get placed atop a rail car, containers can be double stacked on the train cars at the ports and move directly out into the larger national rail system.

The final major innovation that has shaped logistics was JIT, or Just In Time shipment. Instead of having a manufacturer control what is being produced and the wholesale cost of products, the retailers, taking advantage of the shopping center surrounding communities more and more Americans are living in, use the power of large scale sales floors and on the spot projections to create and mold the demand that producers then have to adapt to. Instead of factories making products, and retailers having to store those goods until they were expended, and having to suffer the repercussions of having products that didn't sell well put great strain on retailers. But now the balance of the "Push-Pull" economic model has changed. Walmart, Costco, Home Depot, and other large retailers are able to directly and quickly access the consumer base and compel producers to meet their demands instead of the traditional vise-versa model. Now individual stores with large backrooms for storage are increasingly a thing of the past. A centralized distribution center supports a number of satellite stores who then report to this base whenever they need something. Traffic to these larger d.c.'s is then managed based off the expected shopping seasons, which means that related port activity will also be affected seasonally.

The ports of San Pedro are the leaders in this revolutionary process, which has enabled them to expand the reach of intermodalism across the entire nation, and to the larger world as well. Annually, about half of the 15 million TEUs (twenty-foot equivilancy units) at the Ports of LA and LB are handled intermodally.

The increasing cost of operations at the Ports (environmental provisions, the Clean Trucks Program, etc), along with (prior to the recession) limited space has led many to believe that intermodalism at these ports has peaked and will decline substantially in upcoming years. Reasons for this thinking include:

1. Asian production increasingly moving to Mexico, which will divert sea-transport to ports south of the border (ports like Lázaro Cárdenas and Punta Colonet for example) for products to be "finished" (just enough to comply with NAFTA) and get trained in to the market place;
2. Panama Canal expansion will enable the newest, largest vessels to use the Canal, and get same Time of Delivery to markets on the Gulf and East Coast. Again, this will divert ships away from the Western United States, and their gold mines in San Pedro;
3. Rising fuel costs will favor water transport over land transport, increasing the viability of all-water routes through the Panama or Suez canals.
   

San Pedro intermodal traffic will decline. Ports all throughout the nation, in Mexico, as well as in Canada, will share the logistical load.

San Pedro-based investments, economic and environmental alike, gain their funding because of the massive amount of products flowing through its gates. From the Alameda Corridor to the Clean Ports Program, political power and infrastructure funding will not be so readily earmarked when these ports and their corresponding networks no longer brings in 30% of imports, an overwhelming majority percentage over all other trade hubs in the United States.

What one person, or segment of society, views as economic downturn and diminished opportunity, another, or others, see as prospect for profit..

Into the United States flows millions of containers worth of commodities, ranging from electronics and furniture to toys and tools, produced through largely "global sweatshops, or factories that pay close to or below subsistence wages where typically young, female employees work long hours under harsh and sometimes dangerous conditions" (Bonacich).

There was a time when labor conditions were worse in the United States, most of its history actually, but beginning in the late 19th century organized labor groups sprouted up, and key nodes of the economy were affected, from manufacturing to transport, to the loading and unloading of goods.

The Bay of San Pedro was dredged and completely reconstructed to ensure the flow of merchandise and people was monopolized by the Robber Barons who constructed the Central Pacific Railroad and a few others while circumventing competing San Diego-based investors from using their own naturally endowed harbor in the expanding national transcontinental railroad construction program (Fogelson).

The names of these men, Stanford and Huntington amongst others, are strewn around the city of Los Angeles and state, though to most people living and moving through the concrete blood vessels street and place-names stand amongst a sea of other unrecognizable and/or unknown terms that make up the nomenclature of our subdivided enclaves.....Eldridge Avenue, Sherman Way, Arleta, Ottoman, and Kismet Avenues, a smalll sampling of those I cross on my own daily travels.

While the ports brought great ongoing wealth into the posterities of the forefathers of the national logistics networks, their own search for monopoly enabled the laborers taking goods to and from the docks, in and out of the holds of ships, and moving in and out of the warehouses to form unions and gain the right of collective bargaining. From this base of power desegregation would occur before the Civil Rights movement, because of visionaries like Harry Bridges, who foresaw that color was a tool of division utilized by management in order to undermine the overall labor pool, regardless of "race."

It would be the ILWU's support of the organizing United Farm Workers Union (UFW) that broke the resolve of business backed by the Federal government, at that point under the control of President Richard Nixon. While it has in its own past a history of racial intolerance and hostility ILWU has become a pathway for working people of all walks of life to gain upward mobility, to send their children to universities, and to enjoy quality health care and quality of life.

This has led big U.S. importers like Wal-Mart and Costco and their transporters Maersk-Sealand and others, to search for alternate gateways.

In their eyes, Mexico is looking better and better all the time.

In the words of APM (Maersk) Director of Rail Operations as Pier 400, whom I was able to speak to a while ago concerning their own movement of operations to Mexico, "Mexican drayage drivers alone will work for half the cost that the current owner-operators earn. The 'Clean Trucks Program' will increase our costs to do business, and we are all about our bottom line here."