I Was At VW’s New Port During The Biggest Dockworker Strike In Decades. Here’s What I Learned

I’m at the airport now, waiting for my flight back home from one of the more unusual press trips that I’ve been on in some time. It was a trip not to show off any particular car, but rather to show off an impressive and important new facility, the grand opening of the Volkswagen Group’s new Port Freeport, in Freeport, Texas. This is the company’s new Gulf Coast shipping hub that will provide cars coming from Europe and Mexico to over 300 dealers across the Central and Western US, reaching as far as the Pacific Northwest. It’s a huge, impressive facility, and it just so happens that VW’s grand opening of it coincided with the first significant dockworker’s strike since 1977.

This is some pretty spectacularly bad luck for VW, to open a huge, $114 million dollar facility that will process 140,000 Volkswagen, Audi, Bentley, Lamborghini, and Porsche cars (Bugatti is too good for conventional shipping, it seems, ooh la la) right as this historic and huge strike is happening, but fortunately the local union that works at Port Freeport, International Longshoreman’s Association Local 24, has not decided to strike at this point.

I learned an awful lot on this short trip, not the least of which was the fact that each local union acts independently, and each local’s president gets to decide if they want to strike or not. In the case of Local 24, the union seems to be at least currently satisfied with how things are going, and, as far as VW is concerned, that’s just fine by them.

I Tried To Learn More About The Strike

The main reason I learned so much on this little jaunt was because I spent a lot of time listening to Anu Goel, Executive Vice President, Group After Sales & Services for Volkswagen Group of America, Inc., who is in charge of ports like these and seems to be – and I mean this in the nicest, most respectful way – a genuine logistics geek.

This dude’s face lit up when talking about trade routes and shipping and how resources need to be moved and allocated efficiently like no one else I’ve ever seen; the man loves logistics. He also explained VW’s relationship with Local 24, and I asked why they haven’t decided to strike.

He told me that was a “good question he’s reluctant to ask,” because, essentially, if it ain’t broke, don’t fix it. He said he keeps out of union politics, but accepts that unions are a part of this world, and he always wants to talk to them openly and honestly. The opening was planned in such a way that no picket lines would be crossed by anyone, and he seems to genuinely respect the unions.

Goel also mentioned he was expecting something like this to happen as far back as June or July, and noted that once negotiation details were published in the newspaper, he knew things were going badly. You never want to negotiate via the media, he noted, because at that point you’ve lost control. I think he’s right about that.

As far as the timing of the strike, I think there are some interesting things to note. First, Goel explained that right about now, end of September to early October is when retail outlets want to stock up on all their holiday shopping inventory, so it’s the start of one of the most crucial and busy shipping times. It’s no coincidence that the union contracts expire about now, because they know this is the period of time when the incentive to wrap things up will be strongest.

The union contract is six years long; one of the main issues, in addition to better pay, is protection from job losses through automation. Personally, I suspect that this strike is happening now because it has been within the last six years that advances in automation and robotics and AI have accelerated to the point where the threat of being replaced by machines is seeming quite real.

It’s not an easy thing at all to deal with; automation will very likely make for more efficient everything, but will consumers really see the benefits of that, or will companies just make more and more profit? The price of new cars certainly hasn’t come down with the addition of more automation, for example. And people losing jobs is terrible, and if you can’t work, you sure as hell aren’t going to be buying new cars, either.

Of course, I have no solution to this problem, which has been around since the first steam engines started belching clouds and moving pistons. Automation will happen, but somehow we need to guide it in such a way that it doesn’t decimate jobs. Shipping companies have had record profits in recent years, so it’s not like they need to do this to squeeze out profits; they’re doing just fine.

Again, I don’t know the answer to this, and I don’t think anyone does. I was told that this strike can go on maybe a week or two, and then after that things are going to get really rough global shipping and supply chain and just getting-stuff-wise. When things do eventually start back up, that will only bring about whole new sets of problems.

For example, Goel, who got called out of our meeting to hop on a call with the United States Deputy Secretary of Transportation to answer questions and give advice about all of this mess, mentioned that after the strike ends, someone needs to figure out how to service and unload the vessels that have been waiting. Is it first in, first out? Do some ships and cargoes get priority? Nobody really knows at this point, and it all needs to be figured out now, so things can get moving again as quickly as possible once everything is resolved.

All of this was just lingering in the background of the whole tour of the facility, which, to be brutally honest, seemed mostly like massive warehouses and automotive workshops and body shops and vast parking lots filled with cars wrapped up in white plastic.

They Do A Lot Of Work On These Cars At The Port

I asked about those white plastic covers, and I’ll tell you everything I know about them: they’re only used for cars coming from overseas. The trip from Emden, Germany to Freeport takes 21 days, and those plastic covers protect the cars on that journey from scrapes and scratches and that sort of thing. Salt air getting trapped under them isn’t great, though, so they have to watch for that.

Cars coming by rail from Mexico or by truck do not have the full body wraps, because grit or gravel could get trapped between the plastic and the paint and wreak some havoc.

Of course, should havoc of paint or other body damaged be wreaked, Freeport has extensive body shop facilities, and can fix almost anything. We’re talking full paint booths and the whole works. Yes, at the port. Oh, and also, all factory accessories are installed at the port facilities — even complex stuff that requires drilling holes, so pretty much anything from a tow hitch to a roof rack to exhaust tips to a rear wing are getting installed here, not at the factory, and not at the dealer.

We were supposed to see one of the massive roll-on/roll-off car carrying ships on the tour, but a certain troublemaking hurricane named Helene prevented the ship from arriving in time. These ships are truly massive, like entire mall parking garages floating on the water. VW has switched from diesel ones to liquid natural gas (LNG)-powered ones, which are wider ships, and are so much wider that at their old port facility, it was no longer possible for two ships to be abreast in the channels. Freeport’s larger channels take care of that problem.

I did ask why the LNG ships are wider than the diesels, and while Goel didn’t know, he promised to find out for me, so I’ll update when I have an actual answer. My theory is that LNG is less energy-dense than diesel, and as such requires physically larger tanks. But I’m not sure why larger has to translate to width (beam? Isn’t that what they call the width of a ship?) but when I find out, I’ll update this so we all can know.

Even without seeing the massive ships and being awed by the scale of it all, it’s easy to be awed by the more mundane but equally impressive scale of this facility. For example, there are 13,400 parking places, and they break down like this: