Logjam of Cargo Ships Grows Off Coast as Port Talks Drag On
The high-stakes battle of wills that has closed all commercial West Coast ports, causing billions of dollars in economic losses, continued Saturday, with little progress on key contract issues.
As a federal mediator shuttled between negotiators for the longshore union and port employers in a San Francisco hotel, a deal was forged allowing crucial shipments to Alaska and Hawaii. Both states rely heavily on imports for daily necessities. But most ports remained silent, and dozens of container vessels carrying food, garments, electronics and other imports joined the growing logjam off the coast.
The Bush administration issued its strongest statement to date on the lockout, calling on both parties to “go back to work and resolve the problems.” But White House spokesman Ari Fleischer declined to say whether Bush was considering federal intervention, which has been urged by a growing number of business and political leaders.
“The president’s message to labor and management is simple: You’re hurting the economy. You are hurting your fellow workers and unions in other parts of the country, whose jobs depend on the products you ship,” he told reporters in New Hampshire, where the president was attending a political fund-raiser. “People in the rest of the country, who depend on the products that your ports provide, are starting to suffer setbacks.”
Robin Lanier, director of the West Coast Waterfront Coalition, which represents retailers and manufacturers who use the ports, said her group was “extremely disappointed” in the administration. “When we are going to have virtually all factories in the U.S. closed down by this, it’s not enough to have your press guy read the riot act to both sides,” she said. “This statement that was made by the press secretary should have been made many days ago, so it really looks like too little too late.”
The Pacific Maritime Assn., which represents shipping lines and terminal operators, closed the ports last Sunday after a series of worker slowdowns. It said it would reopen the ports only if the union signed a new contract or agreed to extend the old one, which would prevent workers from staging disruptions.
But a contract extension “will never happen,” said an International Longshore and Warehouse Union spokesman, Steve Stallone. He said union leaders were pleased to see “cracks” appearing in the shutdown, referring to the exceptions granted for Alaska and Hawaii, and were pushing for further exceptions for perishable produce and grains.
The union and shipping group have been in contract negotiations for nearly five months. Talks bogged down on the employers’ desire to introduce labor-saving technology, such as scanners, remote cameras and electronic tracking devices. The union says it will allow such technology only if it is guaranteed control of the information and jurisdiction over all related jobs. In addition, the union wants to control planning jobs that are crucial to the flow of goods through the ports. “If they want technology, they have to give on jurisdiction,” said a union officer who asked not to be identified.
Both sides consider the outcome of the dispute, which involves only about 100 jobs, to be key to their futures. Negotiations, which were expected to continue until midnight Saturday, were set to resume today. “We’re at the table. We’re continuing to negotiate. We expect to negotiate late into the night,” said Steve Sugerman, a spokesman for the shipping group. “We are working hard to get a deal.”
The ports of Los Angeles and Long Beach were quickly filling up. At midday Saturday there were 107 cargo ships scattered in the harbors and off Huntington and Newport beaches. Capt. Dick McKenna, deputy director of the Marine Exchange, said 40 more vessels were expected by the end of Monday. “We are approaching our limits,” he said. “For a while, it looked as if everything was going to stabilize, but then the numbers took off again.”
In a statement released late Friday night, Labor Secretary Elaine L. Chao urged both sides to settle the dispute. “The continued closure of the ports on the West Coast is having effects beyond the immediate parties,” Chao said. “Both management and the union should recognize that workers, farmers and consumers are paying a price for this continued impasse.
Businesses across the country watched the clock nervously as the impasse approached its second week. If the dispute is not settled soon, growers face the ruin of their produce. Sellers of toys and clothing predicted bare shelves and plummeting holiday profits.
Many retailers, including Gap, Best Buy, Williams-Sonoma and others, said they had contingency plans for at least part of their imports, including the rerouting of some shipments to the East Coast and, at much higher costs, sending critical merchandise by air freight.
But the nation’s largest retailer and No. 1 importer of goods, Wal-Mart Stores Inc., said it has few alternatives to waiting for the ports to reopen, because the company’s enormous loads make other shipping methods impractical. Although Wal-Mart has already received most of its holiday merchandise, company executives said the stores depend on a constant flow of goods, which the company splits almost evenly between East Coast and West Coast ports.
“All the ships that are planned to the East Coast are full with planned cargo. There is no additional capacity,” said Tim Yatsko, Wal-Mart’s vice president of direct imports. “Air cargo is not an option for us with the volume we do. And the air capacity, just like ships, is pretty tight right now.”
In a letter last week to the Bush administration requesting immediate intervention, one retail trade organization said the quick processing of toys, consumer electronics, shoes, clothing and housewares is becoming critical.
“With the retail industry and consumer spending largely propping up a weak economy, the inability to get goods off the ships will quickly result in idling of distribution centers, closure of stores and layoffs of workers,” wrote Tracy Mullin, president of the National Retail Federation. “U.S. consumers will also quickly see an impact, as goods become unavailable and prices rise.”
One study estimated economic losses from the shutdown at $1 billion a day, with costs snowballing the longer the ports remain closed because of the ripple effect on the economy. A study commissioned by the Pacific Maritime Assn. said a 10-day shutdown would cost the U.S. economy nearly $20 billion.
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Times staff writers James Gerstenzang in New Hampshire and Dan Weikel contributed to this report.
