Ports’ Growth Bodes Well for Labor Talks
The next week is critical for the highest job-generating “industry” in Southern California, international trade. Negotiations for a new contract between 90 shipping companies that use the ports of Los Angeles and Long Beach and the International Longshore and Warehouse Union will go down to the wire.
It’s almost certain there won’t be a strike--a shipper participant in the negotiations says privately that “there is nothing on the table that can’t be worked out.”
Peace should not be taken for granted, of course. If there is no contract agreement by 5 p.m. on July 1, work at the docks could be intermittently stalled by informal actions. And that would be expensive.
Goods worth more than $500 million a day move through the two ports and trade directly affects the livelihoods of more than 400,000 people in this region who work in freight and transportation, finance and goods processing. Indirectly, trade is critical to the economic lives of millions of local people, from computer makers to toy sellers, movie actors to city managers.
It’s a growing industry. Tomorrow, when ships are even bigger than today’s giants and unloading is even faster than the 30-container-an-hour pace of today’s cranes, and rail connections from the docks to train yards near downtown Los Angeles and out near San Bernardino are even smoother, there will be vastly more traffic through the ports.
That will mean more jobs, more business for the region. The promise of growth is key to the generally good atmosphere surrounding the negotiations affecting 9,600 members of the ILWU who operate the West Coast ports, from San Diego to Seattle-Tacoma. Los Angeles and Long Beach together account for 53% to 64% of the trade in West Coast ports, depending on whether you’re counting sheer tonnage or numbers of containers.
Along with Los Angeles International Airport--second-largest air cargo port in the world (after Memphis, Tenn., a special case because it is home field of Federal Express) the twin seaports make Southern California the chief goods bearer of the United States.
A lot of investment and intelligent cooperation go into achieving and maintaining that status. So we should understand the participants and issues in the negotiations affecting our most important industry. And we should understand what the region needs to do to retain and build on its position.
The ILWU represents the longshore workers who transfer containers from ship to rail and vice versa, the marine clerks who guide and process those containers full of valuable cargo, and their supervisors. It is highly paid work, about $100,000 a year for the equivalent of 50 weeks of 40 hours each.
But the union has worries. The big issue is not wages but job retention. Computerization of container information could displace marine clerks. Longshore personnel used to do more work on the trains that take goods from the docks than they do now. The ILWU wants its personnel to handle freight on public roads between Long Beach and Los Angeles, but the American Trucking Assn., wanting to use nonunion truckers, threatens to sue.
The shippers in the Pacific Maritime Assn. have been having troubles too. Even though May saw more containers arrive at Los Angeles and Long Beach than any month on record, it was also the busiest month for empty containers, reports George Cunningham, publisher of the Cunningham Report, an authoritative newsletter about trade matters. The empty containers reflected the lingering effects of the Asian crisis, which since 1997 has cut exports from the U.S. to Asia while increasing goods flowing from Asia to the U.S.
Yet negotiations, which are being handled by the Los Angeles locals of the ILWU rather than the San Francisco-based union leadership, are going well. Why? Well, the Asian crisis sent a whiff of bad times through the ports, chastening expectations and tempering demands. At the same time, the crisis is easing and trade is recovering. Shippers have declared a $900-per-container rate increase that they hope will stick.
So both sides see more to gain by compromise. Union jobs will grow in the three years of the contract, even though computerization will displace some current positions. The history of the ILWU has been to accommodate technological change in hopes of gaining jobs from productivity growth. That tradition continues.
But the point to keep in mind is that behind the cooperation of shippers and union and the growth of trade and jobs lies solid investment by the ports, which are owned by the cities of Los Angeles and Long Beach, and private companies. West Coast ports invest more in their facilities and in off-port infrastructure, such as rail yards and warehouses, than do East and Gulf Coast ports, according to Martin Associates, a consulting firm based in Lancaster, Pa.
In Southern California, $2.4 billion is being spent on the Alameda Corridor, which will speed freight through Los Angeles, starting in 2002. Investment in new terminals and other projects at the ports run into hundreds of millions of dollars annually.
But it pays off, in facilities that alone in the U.S. can handle today’s large container ships. It pays off in modern rail warehouse facilities from Lynwood to Ontario. And it pays off in thousands of new jobs every year directly and indirectly connected to Southern California’s preeminence in trade.
There’s a kicker, however. Modern industry ships increasingly by air. So Los Angeles International or other airports in the region need investment and expansion. But such investments are not being made. We should turn attention to the airports’ job-creating abilities, when the seaport negotiations wind up successfully next week.
* SMALL BUSINESS: Interests of small companies are often overlooked at trade talks. C6
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Trade Jobs
The sprawling and often ill-defined “industry” of international trade directly accounts for the greatest growth of jobs in Southern California. The chart shows how many people are employed in freight forwarding, truck and rail transport, warehousing and financing in Los Angeles, Orange, San Bernardino, Riverside and Ventura counties. In thousands of jobs:
1980: 174,700
1999*: 406,000
*Mid-year
Sources: California Employment Development Department, Los Angeles County Economic Development Corp.
