• Port workers in Valparaiso threaten to resume 35-day strike

    07 January 2019

    On November 17, 2018 more than 500 casual workers at Chile’s flagship port of Valparaiso decided to walk off the job to demand a bonus payment, more formal contracts, and improved working conditions. After a series of small demonstrations, around 50 dockworkers linked to Terminal Cerros de Valparaiso (TCVAL) finally accepted an offer put forward by the port operator and returned to work on November 30. The rest of the protesting workers, however, did not reach an agreement with Terminal Pacífico Sur (TPS), the second and most important concessionaire in Valparaiso, until December 21, 2018, which shut down shipping for over 35 days at one of Chile’s most important ports and a major commercial hub to the capital city Santiago.

    The first weeks of the strike were marked by small pickets outside the port facilities and union leaders negotiating with TPS representatives. In recent weeks, however, protests in Valparaiso have turned increasingly violent and spread to other ports along the nation’s Pacific coast. The conflict reached a tipping point on Monday, December 19, when strikers set barricades throughout the city and police agents repressed demonstrators with water cannons and tear gas. Protesters also got into the Dockers’ Union headquarters, resulting in 20 detainees, two injured, and the destruction of much of the furniture in the building.

    One day after the violent protests in Valparaiso, the striking dockworkers received support from their colleagues at the northern ports of Iquique, Antofagasta, Caldera, Ventanas, and San Antonio, the most important one in the country and close to Valparaiso.  In the southern part of the country, dockworkers at the ports of Talcahuano San Vicente and Puerto Montt also stopped their work in support of their colleagues in Valparaiso. The possibility of officially extending the strike to other ports in the country triggered alarms in sectors highly dependent on export activity, such as agriculture, food processing, and chemicals, which send products worth some USD 25 billion to foreign markets each year.

     

    Impacts

    According to the Chilean Maritime Port Organization, the strike has caused more than 50,000 containers to be diverted to other ports, with a total revenue loss of over USD 8 million. Chile’s fruit sector was particularly impacted by the strike in Valparaiso, which handles approximately 55% of Chile’s fruit exports. According to the Federation of Fruit Producers of Chile, fruit shipments from the port of Valparaiso fell 95% as a result of the port strike, going from 59,883 tons between November 16 and December 17 in 2017 to only 3,006 tons in 2018.

    Meanwhile, there was a large increase in shipments at the port of San Antonio, which had already displaced Valparaiso in cargo handling and efficiency due to past port conflicts. However, not all was positive news for the Port of San Antonio, which suffered from increased congestion due to more than 20,000 additional trucks that arrived during the strike. In a normal day, according to San Antonio’s Port Authority, there are about 100 to 150 trucks that are served in an hour. However, due to the massive arrival of operators from Valparaiso, it was necessary to attend to more than 300 trucks in just one hour.

     

    Outlook

    On December 19, the dockworkers union and the port operator TPS reached a pre-agreement, which was later rejected by the dockworkers at a general assembly. The workers argued that the compensations offered by TPS are far below what they demand. Nonetheless, on December 22, workers at port of Valparaiso ended their strike, when union representatives accepted an offer from the operator, TPS, following an agreement signed between the workers and the Ministry of Labor. TPS’s offer includes a bonus of around 760,000 pesos (USD 1,100 or EUR 965), a gift card of 250,000 pesos (USD 365 or EUR 320) and a training course worth over 400,000 pesos (USD 600 or EUR 525).

    On January 3, however, a group of port workers resumed demonstrations in Valparaiso, placing barricades near the Dockworkers’ Union headquarters. Protesters reportedly claim that port officials have not adhered to an initial payment agreement reached two weeks ago and that as many as 22 dockworkers who participated in the December demonstrations have been denied access to the port facilities. On the same day, TPS issued a public statement confirming that the Port of Valparaiso has continued to operate normally despite the most recent demonstrations.

    Lasting 35 days, the 2018 November-December strike at the Port of Valparaiso was the second longest port strike in Chile in the last 20 years and one with important implications for the fruit industry in the country. Supply chain managers should continue to monitor the situation at the Port of Valparaiso because although operations have resumed, further demonstrations are expected in the upcoming days. Moreover, it will take weeks, if not months, to clear the congestion created as a result of the service disruption in Valparaiso.

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