Port Talks Fail; Bush May Act

Talks between the longshore union and shipping line group collapsed Sunday night, and a federal mediator said there was a “good possibility” the Bush administration would invoke the Taft-Hartley Act to reopen West Coast cargo ports.

Peter J. Hurgten, director of the Federal Mediation and Conciliation Service, emerged from a meeting with negotiators from both sides about 11:30 p.m. Sunday, saying there would probably not be further meetings for “a few days.”

While saying there was a good chance Bush would invoke the Taft-Hartley Act to establish an 80-day cooling-off period, Hurtgen noted that it was not his decision.

Retailers, manufacturers and others dependent on Pacific Rim imports, however, have been steadily escalating pressure on Bush to act in the absence of progress in the talks.

Joseph Miniace, president of the Pacific Maritime Assn., which represents shippers and terminal operators, said a three-member board of inquiry that must be impaneled as a precursor to invoking Taft-Hartley was already in San Francisco.

“I’ve been told the Taft-Hartley Act is imminent,” Miniace said shortly before midnight. Asked if expects ports to reopen in the next day or two, Miniace replied, “I think so.”

But he also raised concerns that work slowdowns that prompted the management lockout Sept. 29 would continue.

James Spinosa, president of the International Longshore and Warehouse Union, held out little hope for a quick resolution of the issues separating labor and management.

“This set of bargaining is over for us. We did our best to accommodate the mediator,” he said. “We’re going back to the drawing board.”

Spinosa said the union had offered to extend the old contract for seven days, which would allow ports to reopen, but that the Pacific Maritime Assn. had refused.

Steve Sugerman, a spokesman for the shippers, said that offer was rejected because it was conditioned on removing labor-saving technology from the talks.

“The union effectively decided tonight to keep the ports shut down, and to invite Taft-Hartley,” Sugerman said.

Hurtgen began talks Thursday, shuttling between negotiators for the shipping lines and the union at a San Francisco hotel.

Initially, the talks were described as promising. But that early optimism faded as sessions ran late into each night, with little or no progress reported on core issues.

The Pacific Maritime Assn. closed the ports Sept. 29 after accusing the union of staging a series of work slowdowns that cut productivity in half and made operations more costly than closing the ports entirely.

Since then, the employers have said they will reopen the ports only if the union signs a new contract or agrees to extend the old one, which would prevent workers from staging disruptions.

Political and economic pressure on all parties has been building since then, as enormous container vessels, loaded with food, garments, electronic goods and other imports, stacked up along the coast. Losses in the billions of dollars have already rippled through the U.S. economy.

The lockout has exposed the national economy’s increasing dependence on West Coast ports, through which about half of all seaborne cargo moves.

Retailers with only a few days of inventory on hand are worried about empty shelves at Christmas, and factories dependent on imported parts have already started shutting down.

As the losses grew, a growing number of business groups and legislators called for the Bush administration to invoke the Taft-Hartley Act, which was last used by President Carter in a failed attempt to break a coal mining strike. The AFL-CIO has argued strenuously against using the act.

As a first step, President Bush must appoint a board of inquiry that would investigate whether the lockout was causing significant damage to the national economy. If so, Bush could seek an injunction forcing the ports to reopen.

Even if a deal is cut soon, untangling the backed up cargo at the ports will take weeks, according to shippers and analysts. The first casualty will be traffic around the ports. When the word goes out that the port is opening, truckers are expected to descend on the ports en masse to try to get first in line. Terminal Island in the Port of Los Angeles will be gridlock.

The unloading of the ships is likely to be done on a first-come, first-served basis, although refrigerated cargo, perishables and any emergency items will get priority.

Large retailers desperate for holiday shipments are also likely to place pressure on shipping lines to move their goods to the head of the line, according to industry experts.

But there is a limit to how quickly cargo can move. Shippers are limited by the size of their berths. Taiwan’s Evergreen Shipping Line, whose terminal is on Terminal Island, can handle two ships at a time. In a ship that carries 4,000 to 6,000 containers, there will be space for about 400 refrigerated containers.

Those refrigerated containers will be unloaded first, said Robert Kleist, a longtime shipping executive and advisor to Evergreen. He said each shipping line will have to develop a system for giving priority to containers.

Another bottleneck will be the railroads, which have quit sending container trains to transfer facilities until they are certain they won’t have a pileup of trains stuck on the West Coast.

“I think the railroads are going to have tremendous demand placed on them, once the cargo starts to move,” Kleist said. “I hope they have gotten as many locomotives here in Southern California as they can possibly put on the tracks.”

The union and shipping group, which began negotiating in mid-May, have deadlocked on the issue of technology. Terminal operators want to speed the flow of goods through their terminals by using scanners, sensors and electronic tracking devices, which will keep track of thousands of containers on ships and in the yard.

That technology would eliminate about 400 highly paid marine clerk jobs, union negotiators said. They said they would accept the losses only if they were guaranteed jurisdiction over all new jobs related to the technology, including computer programming and repair, plus some planning jobs that are now nonunion

For decades, as technology changed the nature of dock work, the union has fought to defend or expand its jurisdiction and thus retain control of the waterfront. It has used that control to win some of the best wages and benefits in blue-collar America. Average wages range from $80,000 to $167,000 per year, according to the shipping group.

Already, the port closures have cost Southern California communities $375 million in lost trade from the ports of Los Angeles and Long Beach, according to a study released this weekend by the Los Angeles County Economic Development Corp.

California has suffered a $1.2-billion hit to its import and export business, just from the closure of the two ports, the agency said.

Those losses are only part of the total economic damage, said the agency’s Wally Baker, because the numbers are based on customs data and capture only about two-thirds of the total value of goods shipped through local ports.

“Some of the overall money will be collected on those products once they get delivered, but you will see that it can take a long time to recover from a one-week shutdown of those ports,” Baker said. “Some of the smaller people will go out of business. They can’t stand this for very long.”

Many businesses said they had tried to prepare for disruptions by accelerating shipping cycles and planning alternate transportation. But most added that if the ports remained closed for two weeks or more, there would be little they could do to salvage the goods that would not make it to manufacturers and retailers around the globe.

By the weekend, at least 160 container ships were stranded along the coast, with the largest number at the ports of Los Angeles and Long Beach.

With 40 more vessels expected by the end of today, those ports could be beyond full.

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Times staff writer Evelyn Iritani contributed to this report.