Truckers Slow Port Shipping to a Crawl
Truck traffic at the normally bustling ports of Los Angeles and Long Beach plummeted Wednesday as thousands of truckers stayed off the job as part of an increasingly tense labor feud.
Cargo carriers reported that operations were slowed to 20% of their normal pace in some cases. At Hyundai America Shipping Agency, officials rerouted a 4,400-container vessel, the Hyundai Federal, to deliver inland-bound cargo to Seattle instead of Long Beach, where those containers are usually unloaded.
“These companies have to do business,” said Bob Magna, Hyundai America’s vice president for sales. “They don’t have to go through L.A.”
At the Hanjin Shipping Co. Ltd., officials said they had begun plans to divert import and export traffic to the Oakland harbor, resulting in two-day delays to the Midwest and East Coast.
“How long this will go on is anybody’s guess,” said Paul Laign, Hanjin’s general manager of North American operations. “We’ll continue to react as required, in terms of cargo that can be diverted. It’s costing us money certainly, but that’s better than risking it being stopped altogether at L.A.-Long Beach.”
On the concrete decks of the loading terminals, where the whine of dockside cranes and the rumble of tractor-trailers are the sounds of money being made, there was an eerie--and to shippers, deafening--silence Wednesday morning. Scattered handfuls of truckers picketed outside the gates of terminals, but there were no reports of violence amid a highly visible police presence at both harbors.
The slowdown stemmed from labor troubles that boiled over this week. An estimated 5,300 truckers who independently contracted their own rigs have now joined a start-up labor-leasing firm and are in the process of joining a union, Local 9400 of the Communications Workers of America. The truckers, who flocked to the firm’s offer of $25-an-hour pay, insurance and other benefits, were not sent to work after the firm opened Wednesday--in part because several trucking companies have refused to lease their services. The union and the firm, Transport Maritime Assn., said they signed an interim contract late Tuesday.
Union Director Laura Reynolds said the organization was making progress in efforts to persuade other companies to enter collective bargaining pacts with it. At the same time, hundreds of drivers employed directly by trucking companies, who are also members of the union, stayed off the job to protest what they consider unfair wages and difficult working conditions at the port, such as long delays to pick up their loads.
The combined labor actions have stunned Los Angeles trade circles; shippers are scrambling to adjust schedules and calculate losses. Port officials and truckers, recalling a bitter strike in November 1993, are beefing up security in anticipation of fights between drivers recently hired by the leasing firm and those who wish to continue as independent contractors. Other trucking firms are wondering how long they can stay in business.
“We’re running incredibly short-staffed,” said Maureen Heagney, a spokeswoman for the California Trucking Assn., a Sacramento-based trade organization. “There are goods due to market, and they aren’t going to get there.”
Most shippers who call on the Los Angeles-area ports run their vessels on set rotations, usually from Asia to Los Angeles or Long Beach, then to Oakland or Seattle. About half the cargo delivered to Southern California is consumed within the region, with the other half destined for sites across the country.
To divert their traffic, some shippers have instructed their vessels to unload only cargo that would be consumed locally. The rest is being sent on to the next North American stop on the rotation and then reloaded onto rail cars or trucks.
Masaharu Ikuta, president of the Tokyo-based Mitsui OSK Lines Ltd., said his company had received requests from major department stores in Dallas, Memphis and other cities to redirect shipments to Oakland or the Pacific Northwest.
Cargo unloaded at the twin ports must be trucked out in most cases. That means the standardized 20-foot-long containers, filled with everything from clothes to electronics, will be stranded in the terminals.
And local exporters who have goods warehoused and waiting to be driven to the harbor for shipping are also dependent on trucks.
Jack Kyser, chief economist for the Economic Development Corp. of Los Angeles, a nonprofit business association, said shippers would divert cargo in greater numbers the longer the labor feud continues. According to his estimates, 369,000 jobs are dependent on the twin ports.
“We are a major trade center, but that can’t be taken for granted,” Kyser said.
At the Long Beach port, six of the seven terminals were using dockside rail systems to ship delivered cargo, spokeswoman Yvonne Avila said. But there and at the Los Angeles port, where dockside rail is under construction, shippers said containers will begin to pile up if truckers do not return to the roads soon.
“I do know five or six good-size carriers will close up shop because of this,” said Lee Fowler, vice president of the Wilmington-based Athens Transportation Systems, which uses a regular pool of 45 independent truckers. Only 15 showed up to work Wednesday, he said, because many were intimidated. “We’re financially strong enough to ride this out. I just tell shippers, ‘We’re playing it by the hour. If I don’t have the trucks, I can’t help you.’ ”
Donald Allen, a former insurance agent who started the new leasing firm, said his staff was overwhelmed with job applications Wednesday, and estimated he had hired 5,300 truckers--believed to be a huge share of the locally available pool. The company, which Allen said was launched with a venture capital investment of $125 million, has pledged to pay its drivers $25 an hour and expects to purchase all their rigs for a total of $27 million.
Currently, many independent drivers are paid by the job, regardless of the number of hours they work.
He said he has signed lease agreements with a dozen small to medium-size trucking companies, but refused to name them. A number of large companies have declined to sign, saying they will “wait it out,” Allen said. The firm chose not to send any drivers out Wednesday because of “the threat of violence,” but he predicted that the firm’s rigs will be rolling by the end of the week.
At both ports, groups of half a dozen or so drivers picketed in front of terminals throughout the day. In front of the Matson Navigation Co. lot at the Los Angeles harbor, Byron Lopez, a union member and driver for Harbor Rail Transport, carried union signs with five other men.
“Right now, we’re not making any money,” he said. “The rich corporations, they stole the money.”
A group of recently hired Transport Maritime Assn. drivers gathered outside California United Terminals at the Long Beach port to protest the lengthy delays they said they suffered as independent contractors. One man said he had already sold his rig to the new firm for $25,000.
Times staff writer James Peltz contributed to this story.
