Shipping lines hope to avert a port shutdown
With the West Coast dockworker contract running out next year, representatives of shipping lines vowed Tuesday that there would be no repeat of the disastrous labor dispute in 2002, which shut down West Coast ports for 11 days, pushed business to competing ports and cost the U.S. economy an estimated $15 billion.
The next contract should be negotiated early and resolved by the end of this year, several months before the current agreement expires, said Jim McKenna, president of the Pacific Maritime Assn., which represents the shipping lines. McKenna, speaking at an industry conference in Long Beach, said that an agreement was necessary to send a message that the 27 West Coast ports were ready for the next surge in cargo.
“Impeding commerce will be viewed as intolerable,” McKenna said, noting the intervention of President Bush, who invoked the Taft Hartley Act to bring the last labor battle to an end. “Now, people understand the importance of the ports to the national economy. The closer we come to the end of this contract without an agreement, the more the phone lines from Washington to us will be burning up.”
There was no immediate response from the 15,000-member International Longshore & Warehouse Union to the unusual call for early contract discussions, and a statement from union headquarters in San Francisco made it clear that the union wouldn’t be rushed.
“The union officers and the Coast Committee, which represents the Longshore division, will discuss this amongst ourselves, but we will not be able to issue a statement in the near future,” President Robert McEllrath said. The earliest that might happen would be at the union’s semiannual Longshore Caucus in San Francisco that begins April 30.
During the previous negotiations, both sides dug in their heels over proposals they considered essential. The shipping companies wanted the right to introduce technological advancements that would help expedite the movement of cargo at the expense of union jobs. The union demanded a huge boost to its pension fund.
Shipping lines then accused the union of conducting a work slowdown and responded by locking out union labor at every West Coast port from San Diego to Bellingham, Wash.
In the end, both sides got a measure of what they wanted. The union won its pension boost and the maritime industry earned the right to introduce a number of technological advancements such as radio frequency identification tags for trucks and containers to track them more efficiently.
They also got an unusually long period of labor peace in the form of the current six-year contract, twice as long as normal.
But McKenna said it took the West Coast ports 100 days to catch up with the backlog in cargo at a time when the ports were handling 15 million containers a year. The ports moved 22 million containers last year, McKenna said, adding that it would take months to recover from a comparable event.
McKenna said that the ports, particularly the nation’s busiest container harbor in Los Angeles and Long Beach, were hitting full capacity and would have to double the number of containers moved in 2006 to keep up with the pace of cargo growth. He mentioned possible innovations such as an automated system for stacking cargo containers.
In Los Angeles and Long Beach, McKenna said, “we’re at 85% to 90% of capacity in the slow months of the year. By April and May, we’re at 90%. By June, we’re at 95%-plus. Then we are at capacity until January.”
The conference was organized and run by the Journal of Commerce, a 180-year-old international trade and maritime publication.
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