West Coast port employers expect shutdown due to congestion

WEST Coast seaports could shut down as soon as next week if dockworkers and their employers cannot reach a new contract, according to Pacific Maritime Association officials intending to pressure an agreement between the unionized naval industry workers, after nine months of labor strife negotiations.

Operators of port terminals and shipping lines do not want to lock out the longshoremen, but a move would be inevitable if cargo congestion persists at ports that handle about $1 trillion in trade annually, said Pacific Maritime Association CEO James McKenna.

The maritime association has been negotiating since May with the International Longshore and Warehouse Union, which represents dockworkers at 29 ports from San Diego to Seattle. For months, employers have said ports in Los Angeles/Long Beach, Oakland and Washington state are on the “brink of gridlock” because they are unable to reach a suitable agreement.

Thousands of workers have rallied against their employers, saying they are trying to exploit a crisis of cargo congestion at harbors that usually handle $1 trillion worth of goods annually.

In the recent weeks, queues of massive ships have grown longer in the waters off docks now stacked high with containers of shipped goods.

On Feb. 4, McKenna said the congestion crisis has reached a tipping point, and it would make no sense to pay crews if there is no way to transport cargo containers into the flow of commerce because the dockside yards are too jammed.

“The system can only take so much,” McKenna told reporters before returning to negotiations in San Francisco. “At some point, this will collapse under its own weight.”

Employers have been scaling back work crews since the new year, refusing to unload ships at night and instead focusing on clearing the import backlog from dockside yards. Though terminal operators claim the strategy is working, longshoremen say jobs are being cut back to hurt workers and pressure union negotiators into a bad deal.

Congestion at the nation’s largest ports in Los Angeles and Long Beach is not improving with the cutback of cargo crews, according to officials. Without a new contract agreement, employers could begin a lockout in as soon as five to 10 days.

“I couldn’t tell you exactly, but I can tell you it’s imminent,” McKenna said.

Congestion was already building in the dockyards earlier last year, even before the last contract expired on July 1. Employers have said union-coordinated work slowdowns worsened the problem, and provided data proving the slower cargo (mainly goods from Asia) moving at about half its normal rate since the fall.

“The employers’ action is punitive. It’s a measure to hit the pocketbooks of the workforce. It has zero to do with relieving congestion,” said Bobby Olvera Jr., president of the union’s Local 13 branch.

At least 6,000 workers took part in rallies on Thursday evening in Los Angeles and Long Beach, according to port police. Hundreds more rallied in Tacoma, Wash.

“The demonstration was designed to tell the community what’s happening with the slowdown and to allow longshore workers to support each other,” said Dean McGrath, president of the union’s Local 23 in Tacoma. “This is a scary fight for everyone.”

The Longshore and Warehouse Union has disputed slowdown claims, instead blaming congestion on issues beyond their control—such as a shortage of truck beds to take containers from the docks to distribution warehouses.

In response to James McKenna’s extensive public remarks, the union said that differences between the negotiators are now small.

“We’ve dropped almost all of our remaining issues to help get this settled—and the few issues that remain can be easily resolved,” said union President Robert McEllrath in a written statement.

A lockout would be “reckless and irresponsible,” McEllrath wrote.

McKenna also detailed the proposal his association made earlier in the week, which he characterized as his “best offer” even though he said he would be open to reasonable changes.

A proposed five-year contract, he said, included wage increases of about 3 percent annually, an increase in pension contributions, maintaining hefty health benefits and an agreement to let the union have jobs inspecting truck chassis.

While wages for full-time maritime workers currently average around $147,000 per year, according to McKenna, many speculate that figure is actually significantly less.

“It’s a PR fantasy number,” said union spokesman Craig Merrilees, adding that while some workers do earn that much, the true average is much less than $100,000, in part because many longshoremen don’t work full-time, and when they do, the pay can range from $26-36 an hour.

West Coast seaports typically handle about a quarter of the entire nation’s trade, as measured by dollar value. Employer contract talks taking place are expected to resume over the weekend.

Congress urges a swift, joint agreement

Congress has already expressed their concerns about the impending port shutdown. Concerns about the devastating economic ripple effect this will have on the country and its supply-and-demand chain, California congressional members including Rep. Ed Royce (CA-39) and Rep. Judy Chu (CA-27) wrote a joint letter last month to the union president and Pacific Maritime Association Chairman, McEllrath and McKenna, urging them to resolve their differences.

“Our constituents are losing business, letting employees go, and worrying about the future. As trade supports over 38 million jobs across the country, we strongly urge your organizations to reach an agreement, because the inability to reach consumers outside our borders impacts jobs here at home,” the letter, dated Jan. 30, said.

“The inability to ship perishable products in a timely manner and to import manufacturing inputs is devastating to communities across the country…the US agriculture industry suffers as our specialty crop producers are facing lost export sales and increased costs for cold storage. This will have a long-term impact as well, as our farmers lose market share. These delays in shipments will not only impact the businesses and their employees, but will have ripple effects throughout our local communities.”

According to the Department of Commerce, last year imports and exports comprised 30 percent of the nation’s gross domestic product (GDP), and the total trade reached five trillion dollars. The letter emphasizes the importance of trade in the US economy and how Americans rely on its infrastructure, especially on its seaports through which goods are distributed.

Many of the goods and products shipped to the US are from Asian markets worldwide, creating a chain blow that would affect Asian businesses both at home and abroad.

“A lot of these products affected are being imported to and from Asia—especially the seasonal and holiday goods like Christmas gifts, which are still sitting at the port,” said Dennis Huang, president of the Asian Business Association, which represents Asian American business owners and creates opportunities for its members and communities. “I’ve heard of many businesses who are importing and doing distribution, manufacturing out of Asia, and the port shutdown could affect them greatly, especially if they are seasonal. It can and will affect each city and district’s economy.”

“We are petitioning, writing letters, and connecting businesses with their elected leaders. But at this point all we can hope for is an agreement,” Huang added.

The Congressional letter also cited a similar West Coast port shutdown in 2002 that cost the economy over $15 billion, saying a current-day shutdown would be even more costly for the entire manufacturing industry.

The letter was also signed by over 80 members of Congress from different districts, expressing the same urgent concerns about the ongoing contract negotiations, and the impact a lack of agreement would have on each districts’ economy and its constituents.

(With reports from Associated Press, Library of Congress) 

(LA Weekend February 7-10, 2015 Sec. A pg.1)

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