Inspections Halted at United Grain Due to Labor Spat

By MarEx 2013-09-05 07:42:00

U.S. grain inspections at the United Grain Corp (UGC) export terminal in the Pacific Northwest have stopped as a labor dispute heats up, but so far grain shipments have not been affected, a spokesman for a grain shippers group said on Wednesday.

Representatives from UGC, a unit of Japanese trading company Mitsui & Co, are in talks with port officials and with grain inspectors to find a resolution.

However, concerns mount as the U.S. harvest accelerates and overseas shipments of grain to customers in Japan, China, and other Asian destinations are poised to rise.

"United Grain has participated in efforts to resolve the issue. Grain shipments have not been affected so far," said Pat McCormick, spokesman for the Pacific Northwest Grain Handlers Association, a coalition of grain shippers in the region which includes UGC.

Inspectors from the Washington State Department of Agriculture (WSDA), who certify the corn, wheat and other commodities shipped from the facility, were denied access to Port of Vancouver a week ago and have been turned away by port officials nearly every day since.

It was the latest development in a year-long contract battle between workers represented by the International Longshore and Warehouse Union (ILWU) and the Pacific Northwest Grain Handlers Association over work rules and pay.

UGC, part of the coalition, locked out ILWU workers in February and union members have since been picketing outside of the port's east gate, which the port has designated for all UGC business, including picketing.

Inspectors tried to enter the port via the main gate last Wednesday because they felt threatened by the increasingly hostile demonstrators as they crossed the picket line at the east gate.

"We're not a party to the labor dispute. We're a neutral party. But because we're having to enter the gate we're still subject to the harassment of the picket line," said Hector Castro, communications director with the WSDA.

"It reached a point where our inspectors were no longer comfortable going through that gate without some improvements to security there," Castro said.

UGC Chief Executive Gary Schuld also cited inadequate security as a key failure by the port in a letter to the WSDA director, the port and other officials seen by Reuters.

The port says that security is adequate and that allowing inspectors to use the main gate was not an option.

They fear that if they allow inspectors to enter via the main gate, the ILWU picket line would move there as well and possibly shut down the port entirely as workers from other unions may refuse to cross.

"Letting the grain inspectors in through the main gate wouldn't fix the problem, it would only move the problem. The main gate is not an option for us," said Theresa Wagner, communications manager with the Port of Vancouver.

Every load of grain bound for a foreign market is required by law to be inspected by a state or federal inspector so a prolonged halt to inspections could stop export shipments from the UGC terminal just as newly harvested grain begins to arrive.

An ILWU spokesman could not be reached for comment.

The Pacific Northwest's nine bulk grain terminals are a critical outlet for U.S. grain exports. Nearly half of U.S. wheat exports and about a quarter of all U.S. grain and oilseed exports exit the country via the Pacific Northwest.

Reporting by Karl Plume; Editing by Tim Dobbyn (C) Reuters 2013.