Business

Obama sends Labor secretary to California to jump-start port talks

Ports
Container ships wait outside the ports of Los Angeles and Long Beach, which are facing increased congestion this President’s Day weekend with the unloading of ships halted amid a labor dispute between port employers and the dockworkers union.
(Bob Chamberlin / Los Angeles Times)

President Obama is sending Labor Secretary Tom Perez to California to meet with ship owners and longshoremen involved in the ongoing labor dispute that threatens to shut down 29 West Coast ports, a White House advisor said Saturday.

As Obama prepared to leave San Francisco on Saturday morning, aides said he summoned Perez to get the parties together to talk. The union representing dockworkers and the Pacific Maritime Assn. met Friday without reaching a deal. It’s unclear when negotiations would resume.

The workers’ last contract expired in July and the two sides have been operating without one since. The dispute broke open in the fall when the shipping group accused union workers of slowing down on the job as a negotiating tactic.

Q&A: What you need to know about the port dispute

In response to the alleged slowdown, the maritime group has barred the unloading of ships this weekend and Monday, mostly shutting the trade gateways. The ports are expected to resume normal operations Tuesday.

Congestion at the ports has delayed shipments from Asia and hurt businesses that rely on parts and supplies from China and elsewhere. Some businesses are rerouting goods by air or through ports on the East Coast, but those work-arounds have been expensive. The Los Angeles and Long Beach ports account for about 40% of the nation’s incoming container cargo. In 2013, the two ports handled roughly $400 billion worth of goods.

The San Pedro Bay facilities have experienced severe bottlenecks since September, as workers contend with ever-larger container vessels and a shortage of trailers that truckers use to haul goods from the ports.

The local union denies engaging in slowdown tactics, as the shipping group has asserted.

The two sides have been negotiating for nine months. Tentative agreements on healthcare benefits and the union’s role in maintaining truck trailers have been reached. But employers say a major hurdle is rules governing the removal of arbitrators, who settle disputes on the docks when a labor contract is in place.

Obama still thinks the problems need to be solved at the bargaining table without intervention from the federal government. But he thinks Perez may be able to help the parties find common ground and dispatched him "out of concern for the economic consequences of further delay,” White House spokesman Eric Schultz said Saturday.

Perez will travel to California to meet with the sides "to urge them to resolve their dispute quickly at the bargaining table,” he said.

Perez is already in contact with the negotiators, Schultz said.

The White House did not specify when the meetings would take place. 

Despite the $1 billion in goods flowing daily through the ports in San Pedro Bay, economists and trade experts said closures would have very little effect on the broader U.S. economy.

The effects of port closures would be more acute for the Southern California economy, where local jobs in trucking, rail yards and warehousing are at stake.

“The port is an economic engine of Southern California,” said Sung Won Sohn, an economist and professor at Cal State Channel Islands who is a former commissioner at the Port of Los Angeles. “If one of the cylinders doesn’t operate properly, clearly we’ll all be hurt.”

Many workers in Southern California’s logistics and warehousing industries are temporary employees who could be easily sidelined if the flow of goods comes to a halt.

Charlie Woo, chief executive of Megatoys, a City of Commerce toy manufacturer and distributor, said the slowdown forced him to let go of more than 600 seasonal workers in recent weeks who would normally be assembling gift baskets for Valentine’s Day.

He said he has about 80 containers’ worth of dolls and other toys stuck at the ports. Normally he’d be receiving about 20 to 30 truckloads a day, but lately it’s been fewer than three.

“My Valentine’s business was completely destroyed, and my Easter season is on the verge of being destroyed,” he said.

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