Shipping companies say West Coast ports, including those in Los Angeles and Long Beach, could shut down if a new contract isn’t reached with dockworkers.
A flotilla of ships — filled with cars, electronics and clothes from Asia — have anchored off the coast waiting for the docks to clear. Both sides blame each other for the severe traffic jam.
On Thursday — after a five-day hiatus — the two sides resumed negotiations in San Francisco but no agreement was reached. The union representing dockworkers and the Pacific Maritime Assn. met again Friday without reaching a deal.
President Obama has sent Labor Secretary Tom Perez to California to meet with ship owners and longshoremen, a White House advisor said Saturday.
Here’s what you need to know:
What will happen if the ports shut down?
A shutdown promises to delay numerous products from Asia including furniture, cars, toys, clothes and electronics. According to a shipping industry estimate, 12.5% of U.S. gross domestic product is tied to goods that flow through the 29 West Coast ports. The ports of Los Angeles and Long Beach together handle roughly 40% of the nation’s incoming container cargo.
Businesses that rely on the ports for their goods are likely to face rising costs from delays and possibly lost sales.
The last time the ports closed, in 2002, some manufacturing plants were idled because they relied on timely shipment of parts. Port truck drivers were without jobs, as were dockworkers.
However, there weren’t widespread reports of job losses and even major agricultural exporters said they only saw partial losses of their perishable goods. Some economists said many companies escaped severe losses because the federal government stepped in.
The lockout ended in 10 days after President George W. Bush invoked the rarely used Taft-Hartley Act to pry the gates open. President Obama has not said what he would do if the ports shut down again.
What does this mean for me?
Stores shelves won’t go bare, trade experts and economists said. Warehouses across Southern California are stocked with goods that have already made their way into the country or were made here. And some businesses have been stockpiling parts and supplies, aware that labor strife could erupt on the docks.
Businesses also can re-route products by air or to East Coast ports. But that’s costly. And some specialty items may be temporarily unavailable, said Patrick Anderson, principal of Anderson Economic Group, a business consulting firm that specializes in economic impact studies.
If you ordered Asian-made electronics, furniture or other goods from Amazon or another company, you probably won’t receive the product as quickly if it hasn’t already arrived in the country, said international economist Jock O’Connell said. “They’d probably get an email from [the company] telling them that ‘Owing to a dock strike, shipments have been delayed.”’
If the product did arrive, however, but is stuck on the docks, consumers may have to wait even longer.
What are the two sides fighting over?
The dispute centers on a new contract for roughly 20,000 dockworkers at 29 West Coast ports. The union has been working without one since July. Negotiations between the employer group, Pacific Maritime Assn., and the International Longshore and Warehouse Union have dragged on for nine months.
The labor fight escalated in recent days as companies stopped unloading ships during holidays and weekends. They say they don’t want to pay overtime to dockworkers who, they allege, have engaged in slowdown tactics. Pacific Maritime Assn. President Jim McKenna said last week that the West Coast ports could soon become inoperable, forcing shipping companies to shut operations.
The union, however, says there is space on the docks for new containers and accuses shipping companies of raising the specter of a shutdown to gain leverage.
What is causing the bottlenecks?
The nation’s busiest ports in Los Angeles and Long Beach have faced severe congestion since September as shipping companies use ever larger vessels that carry more containers and truckers face a shortage of available trailers to haul goods from the ports.
The Pacific Maritime Assn. accuses the union of making the congestion worse by withholding skilled crane operators who move cargo containers onto trucks and rail cars, thus hampering the ability to quickly clean out the docks. The employer group says that the alleged slowdown tactics started in early November to gain leverage during contract negotiations.
The local union in Long Beach and Los Angeles says it’s only limiting crane operators for safety reasons after several accidents. The union says employers aren’t training enough operators.
What is holding up negotiations?
One of the remaining issues relates to arbitrators who settle disputes when a labor contract is in place. The employer group says the union wants to let either party unilaterally remove local arbitrators at the end of a labor contract. Currently, both sides must agree to fire an arbitrator. Shipping companies say such a change could lead to frequent slowdown tactics because the union could “fire judges who rule against them.”
The union accuses shipping companies of “grossly” mischaracterizing the arbitration issue. In a letter to its members, the union president said one of the remaining issues “is the question of retaining arbitrators who have openly engaged in conduct that clearly compromises their impartiality.”
