Port Closures Start Taking Economic Toll
Economic losses mounted Monday as a management lockout of West Coast union dockworkers continued, idling ships at 29 ports and prompting a business coalition to call for federal intervention.
In San Diego, produce rotted aboard ships that could not be unloaded. In Seattle, 2,400 cruise ship passengers were temporarily stuck on board until a deal was reached that allowed them to disembark. In Oakland, a container ship attempting to put to sea was blocked from doing so by union supporters in small boats.
West Coast ports handle about half the nation’s seaborne cargo. A five-day shutdown could cost the U.S. economy an estimated $4.7 billion--with the losses snowballing to $19.4 billion if the shutdown were to last 10 days, according to a study commissioned by the shipping lines.
The Federal Mediation and Conciliation Service tried to defuse tensions by calling for both parties to meet in Washington on Thursday, but it was unclear whether the meeting would take place.
Negotiators for shipping lines and the International Longshore and Warehouse Union met for two hours Monday afternoon in San Francisco but made little progress, according to both sides. Negotiations were set to resume Wednesday.
The Pacific Maritime Assn. ordered an indefinite lockout beginning Sunday night, saying the union staged “devastating” slowdowns along the coast through the last week. The group said it was cheaper to close terminals than to try to operate under a slowdown.
The association, which represents international shipping lines and terminal operators, said the lockout would continue until the union signed a new contract or agreed to extend the old one. The old contract barred the union from staging slowdowns, association officials said.
Fearing that the shutdown could last through the week and beyond, a business group called for federal intervention.
“You’ve got to understand the ports have been closed, essentially, for three days,” said Robin Lanier, executive director of the West Coast Waterfront Coalition, which represents Wal-Mart, Target, Home Depot and other major retailers and manufacturers that use the ports. “If we get much past the fifth day, this thing is really going to start to hurt.”
Bush administration officials, who have been meeting with shipping executives and major users of the ports since June, maintained a studied distance from the dispute Monday, saying only that they hoped the two sides would agree to mediation. But they hinted that they would act swiftly if there was a failure to reach a settlement.
“At this point we’re urging both parties to resolve their differences and avail themselves of the [mediation] services,” White House spokeswoman Clare Buchan said early Monday. Later in the day, White House Press Secretary Ari Fleischer noted the gravity of the West Coast port shutdown, saying: “If it goes on for even a short period of time, it’s a problem for the economy.”
About $300 billion in goods moves through the ports annually, from personal electronics and shoes to car parts and building supplies. A UC Berkeley study estimated that port traffic supports 4 million jobs nationwide.
ILWU President James Spinosa offered a glimmer of encouragement Monday when he told reporters for the first time that he would consider mediation.
“It’s a possibility,” he said from the union’s San Francisco headquarters.
Spinosa said he would meet with a representative of the Federal Mediation Service today to discuss how the service could help break the stalemate. However, in a statement issued late Monday, Spinosa reiterated that the union “has made no decision thus far regarding the use of mediation.” An official with the shipping association also would attend, a source familiar with the negotiations confirmed.
Spinosa said the 10,500-member union was leery of seeking federal help because administration officials had intervened early in negotiations in a manner the union said favored the shipping industry. A Department of Labor official confirmed in August that he had been in frequent contact with both parties since negotiations began in May but insisted that the administration was neutral and merely wanted to avoid labor disruptions.
Despite encouragement on the mediation front, both sides issued inflammatory rhetoric Monday and appeared to maintain rigid positions on the key issues separating them.
Negotiations have bogged down on the employers’ desire to modernize the ports with technology, such as scanners and remote cameras, that would eliminate hundreds of union jobs. In exchange, the union wants to set minimum staffing levels, expand its jurisdiction to all technology-related jobs and control all information once it enters the ports. The shipping group has resisted those demands.
Shippers have few options for moving transpacific goods. The union controls all U.S. ports on the West Coast, and ports in Canada and Mexico are too small to handle the large container vessels now used to ferry goods from Asia to the United States. Most vessels are also too large to fit through the Panama Canal or to dock at East Coast ports.
The ILWU is known for its solidarity and strength, and it is unlikely that nonunion workers would attempt to cross picket lines. Also, skill sets for many union port workers, from crane operators to gate clerks, are highly specialized and few others can do the work.
The union, whose members earn about $80,000 to more than $150,000 annually, has used those factors to its advantage, and shipping lines claim they gave in to unreasonable demands in 1996 and 1999 after cargo movement was slowed. This time, they said, they will not back down.
“The employers locking out a union on the West Coast is something you could never see before,” said an industry official who asked not to be identified, fearing retribution from the union. “But they have had it and can’t take anymore. We have no revenue coming in, so for us to agree to a lockout was pretty difficult. But we feel it’s necessary, and we are more united than ever.”
Spinosa lashed out at the shipping association for allegedly provoking the crisis, and he refused to sign an extension of the labor contract, which was due to expire July 1 and was extended on a day-to-day basis through Sept. 2.
The 29 ports from San Diego to Seattle were first closed Friday night for what the shipping association called a 36-hour cooling-off period. But work disruptions continued after the ports reopened Sunday morning, leading the association to close the ports indefinitely starting Sunday night.
Monday morning, scores of protesters turned out at dozens of closed gates in Los Angeles and Long Beach, which receive about 60% of trade along the West Coast.
But the demonstrations did not appear to be well-organized. At the new Pier 400 terminal in Los Angeles, ILWU Local 13 members walked about in small groups. One protester started a chant, “What do you want? When do you want it?” but there was no response.
Some protesters questioned the tactics of union leaders, but a veteran dockworker urged them to remain unified.
But a picket line near the Evergreen terminal was more organized and a union leader kept the members chanting.
In the small port of Vancouver, Wash., a handful of workers manned picket lines at terminal entrances, braving wet, chilly weather and holding signs reading “Unfair Lockout.”
Brad Clark, president of ILWU Local 4 in Vancouver, is a third-generation longshoreman who remembered when his father went out on strike for 160 days in 1971. “We got free hot dogs and beans and drank powdered milk to save money,” Clark said. “Now, we’re preparing for the worst and we’re in it for the long haul. This is a fight for our survival.”
Along the coast, at least 125 ships holding an estimated 500,000 containers were stranded, with dozens more scheduled to arrive each day this week.
In San Diego, the Wild Jasmine out of Australia was laden with hundreds of thousands of rotting oranges, port authorities said.
“Normally, we would have two or three ships working,” said wharf manager Bruce Cummings. “You’d see bags of fertilizer, cement, fruit being discharged.”
At Port Hueneme in Ventura County, a ship loaded with bananas and one filled with liquid fertilizer sat idle as dockworkers were sent home another day without work.
Despite some confusion and concern, cruise ships were able to load and unload passengers in San Diego and Seattle after operators negotiated directly with union officials.
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Cleeland and White reported from Los Angeles, Menn from San Francisco. Times staff writers Peter G. Gosselin, Peter Y. Hong, Jessica Garrison and Gregory W. Griggs and Times researcher Lynn Marshall contributed to this report.
