Port of LA Strike Continues for 4th Day

Port of Los Angeles Strike Rolls on as Negotiations Continue

By Brian Sumers, Mercury News

04 December 12

egotiations to end the labor strike at the ports of Los Angeles and Long Beach continued for a fourth consecutive day Sunday, but sources close to the talks said the sides likely were not close to reaching an agreement. | PHOTOS

Reacting to the perceived stalemate, Los Angeles Mayor Antonio Villaraigosa wrote a letter to both sides Sunday urging them to work around the clock and bring in a government or private mediator to help resolve the issues. The sides have been negotiating, intermittently, since Thursday night.

"The cost is too great to continue down this failed path," Villaraigosa wrote. "Mediation is essential and every available hour must be used."

In broad terms, the key issue remains staffing levels, sources say. Negotiators with the International Longshore and Warehouse Union Local 63 Office Clerical Unit want to protect employment for as many of their members as possible, while management officials want more flexibility to control the number of temporary and full-time office workers they hire.

Many elected officials and retail executives had pushed the sides to negotiate an end to the work stoppage - possibly one that would even put the strike on hold while the sides continued to talk - but a quick resolution may no longer be possible, sources say.

In the meantime, many containers destined for Southern California sit elsewhere - on ships that cannot be serviced in Long Beach or Los Angeles or at other ports on the West Coast and Mexico.

The strike began at midday Tuesday when some members of the Office Clerical Unit - one of the smallest ILWU locals with only about 800 total members - walked off the job at APM Terminals Pacific Ltd., the largest terminal operator at the Port of Los Angeles. It spread on Wednesday, effectively shutting down three of six terminals in Long Beach and seven of eight terminals in Los Angeles after other union members refused to cross the picket lines.

The complex is by far the busiest shipping hub in the United States - Los Angeles is the top port by container traffic, and Long Beach ranks second, according to industry data.

Many members of the Office Clerical Unit, who provide back office and logistics support to most of the major terminal operators, have been working under terms of a set of contracts that expired in June 2010. Union members claim managers at many of the terminal companies have been quietly shifting jobs to lower-wage workers in other states and countries, an accusation denied by the employers. Management negotiators say the new contracts must stop so-called featherbedding - or providing temporary and permanent jobs to workers even when there is no work to perform.

The strike is only affecting terminals where the union has contract disputes, so a Disney Cruise Line ship called Disney Wonder was able to dock without difficulty on Sunday morning, Port of Los Angeles spokesman Phillip Sanfield said.

But the port's focus is cargo containers, the majority of which arrive from Asia on gigantic ships. And Sanfield said port officials are urging both union and management to come to an agreement soon, so the containers can move to warehouses across Southern California and beyond.

"Cargo continues to back up and concern is mounting throughout the worldwide logistics chain," Sanfield said. "We need resolution to prevent further economic damage."

Many logistics industry analysts initially said the strike occurred during a historically weak period for international trade because most retailers have already received their holiday shipments.

But the longer the strike lasts, the deeper the impact on the supply chain, industry experts say. Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, said in an interview Sunday that it took retailers roughly six months to recover from the impact of a 10-day lockout in 2002 that affected ports throughout the West Coast.

"This shutdown of the ports doesn't just impact the retail industry," Gold said. "You've got manufacturers who are operating just-in-time supply chains, and you've got exports that aren't moving because the ports are shut down. We're in day five. We need it to end now because it's going to take some time to clear through the backups."

The National Retail Federation is one several groups to ask President Barack Obama to wade into the dispute. Under the 1947 Taft-Hartley Act governing union-management relations, Obama could invoke an emergency mechanism and ask a federal court to order an 80-day cooling-off period. President George W. Bush used the power during the 2002 lockout.

But Gold said the federation has not heard back from the White House regarding its request, which it delivered by letter, and observers say it is unlikely the president will get involved - at least soon.

Several sources have calculated that the strike is costing the economy more than $1 billion a day, but Jock O'Connell, an international trade economist who studies the shipping industry, said Sunday in an email that the figure is slightly misleading. O'Connell said it will be several weeks before anyone will be able to come up with a good estimate on the true economic cost of the strike.

"That billion-dollar-a-day number wrongly assumes that all of the cargo being delayed or diverted will never be delivered and would have to be entirely written off," O'Connell said. "To be sure, someone in the supply chains will sustain losses because of late deliveries, but nearly all of those goods not being handled right now at the ports of Los Angeles and Long Beach will eventually reach a market."

The strike's local impact could be greater if shippers decide to bring their goods to other ports in the future, but that also won't be known quickly. Logistics industry experts say no shippers like to send their goods to areas known for trouble, but they acknowledge most North American ports have some reliability issues - whether due to labor unrest, poor infrastructure or bad weather.

East Coast ports have had their own issues recently. The ILWU's East Coast counterpart - the International Longshoremen's Association - recently postponed plans for a strike that could have crippled trade there this fall. And the Port of New York and New Jersey still has not fully recovered from damage inflicted by Hurricane Sandy in late October.