WITH an ongoing labor dispute between West Coast ports workers and their employers, Labor Secretary Tom Perez traveled to San Francisco on Tuesday, Feb. 17, to help broker an agreement between both parties.
Cargo backlog at the ports has reached a near gridlock amid contract negotiations between the International Longshore and Warehouse Union, which represents the dockworkers, and the Pacific Maritime Association, which represents port owners.
About 20,000 dockworkers throughout 29 ports up and down the west coast have been without a contract since July. Among outcomes of the lack include a partial shutdown of the ports on the weekend of Feb. 7.
Operations at the ports ceased on Presidents Day weekend. By Sunday morning, 34 container ships, tankers and other cargo vessels were waiting to dock at the ports of Los Angeles and Long Beach, said Lee Peterson, a spokesman for the port of Long Beach, according to Reuters.
Shipping companies have accused employees of purposely slowing down to gain leverage at the bargaining table and have periodically stopped the loading and unloading of ships.
“These 20,000 workers occupy one of the central choke points of the entire U.S. economy,” Harley Shaiken, a UC Berkeley professor who specializes in labor unions, told the Los Angeles Times. “That gives them enormous power.”
This past weekend, the companies said they were not willing to pay union employees higher wages for working weekends and the Monday holiday while productivity continues declining.
“After three months of union slowdowns, it makes no sense to pay extra for less work,” said Wade Gates, spokesman for the maritime association, according to USA Today.
Ports along the coast handle about half of all US maritime trade and more than 70 percent of imports from Asia, and with surging trade with Asia, traffic at the ports of Los Angeles and Long Beach have nearly tripled. The twin Southern California ports handle about 40 percent of the country’s incoming container cargo, with $1 billion in goods coming through each day.
The chronic congestion in freight traffic at the ports has affected various industries throughout the country.
“Any company that imports supplies, inventory or parts is going to feel it,” said Ian Winer, a managing director at Wedbush Securities, according to the Times. “There are very few companies who don’t have something coming through those ports.”
Automaker Honda said it would slow down production for a week at plants in Ohio, Indiana and Ontario, Canada due to a delay in receiving parts from Asia.
“We do not have a sufficient supply of several critical parts to keep the production lines running smoothly and efficiently,” said Honda spokesman Mark Morrison.
Similarly, Toyota said it has cut some hours to adjust overtime at certain North America manufacturing plants.
Perez was scheduled to meet with the union and association Tuesday. But even if the dispute is solved, long-term implications could be dire.
“Six months would be a horror show,” Winer told the Times. “Even if this lasts more than a month, it’s going to be a significant issue.”
If the dispute continues longer, consequences could be more dire.
“Trust in West Coast ports is at an all-time low, and the perception of supply chain risk is at an all-time high,” said Peter Tirschwell, chief maritime analyst at the JOC Group, a supplier of US seaborne trade data, according to Reuters. “We are entering another period of fundamental supply chain re-evaluation that is already leading some shippers to permanently abandon the West Coast.”
Such an instance occurred on Feb. 10 when South Korea’s largest shipping company, Hanjin, withdrew from the Port of Portland, where it accounted for 78 percent of the port’s business, according to The Oregonian newspaper. The shipper imported apparel for companies such as Nike, and exported apples, among other crops.
“The longer we have disruptions at the ports, the more and more people say this is a reason to do business elsewhere,” said Mark Vitner, a senior economist at Wells Fargo, according to Los Angeles Times.
Some estimates say if the disputes become a full-blown strike, it could cost the national economy $2 billion per day. However, some disagree with the prediction.
“That’s total nonsense, to be candid,” said economist Christopher Thornberg, according to CBS. “It isn’t to say that there aren’t some individuals, some companies, that are being hurt by this.”
West Coast ports were not completely shut down. Shipping companies said work continues in the dockyards, rail yards and terminal gates as they try to clear some of the containers backed up on the waterfronts.
(With reports from CBS, Los Angeles Times, Reuters and USA Today)
(www.asianjournal.com)
(LA Midweek February 18-20, 2015 Sec. A pg.1)
