Cargo ships stack up as L.A. port strike in seventh day

Reuters News

12/3/2012 4:28:41 PM - Reuters News

By Steve Gorman

LOS ANGELES (Reuters) - Freighters with no place to unload cargo lined up at anchorages off Los Angeles and Long Beach for a seventh day on Monday as shippers and striking clerks resumed talks to end a labor dispute that has idled most of America's biggest container port complex.

With mounting economic losses estimated at several billion dollars, the strike marks the largest cargo traffic disruption at the twin Southern California harbor facilities since a 10-day lockout of longshoremen at several West Coast ports in 2002.

Unlike the labor clash a decade ago, which took place in the fall, the latest dispute is unfolding after the busy pre-holiday shipping season, limiting the scope of its ripple effect.

Major U.S. retailers, including Target and Home Depot, said they have so far been largely unaffected by the strike because the bulk of their Christmastime inventory has already made it to store shelves.

But the National Retail Federation has asked President Barack Obama to intervene, warning that a prolonged strike could have a "devastating impact on the U.S. economy."

The brunt of the latest dispute at the ports of Los Angeles and Long Beach, which together account for nearly 40 percent of all U.S. cargo container imports, has been borne mostly by dock workers and truckers in the region.

Terminal operators also worry about lost business as some cargo is diverted to competing ports.

Striking port clerks remained at loggerheads on Monday with shippers and terminal owners over the future of union representation for clerical jobs after employees retire. The International Longshore and Warehouse Union Local 63 has so far resisted calls for outside mediation.

The 800-member clerical workers unit of the ILWU local walked off the job on Tuesday, with some 10,000 longshoremen and other union members refusing to cross picket lines, forcing a shutdown at 10 of the twin ports' 14 container terminals.

SHIPPING TRAFFIC STALLED OR DIVERTED

Four other container terminals remained open, along with facilities for handling shipments of automobiles, liquid fuels and break-bulk cargo such as raw steel.

The overall economic impact of the strike has been estimated to run at more than $1 billion a day - including lost wages of dock workers, truckers and others idled by the walkout and the value of cargo rerouted by shippers.

The strike has prompted at least 11 freighters to change course and take their cargo to ports in Northern California, Mexico and Panama, according to the non-profit Maritime Exchange of Southern California, which tracks shipping in the region.

Another 11 ships were waiting at anchorages outside the Los Angeles-Long Beach complex, unable to discharge their cargo, said Dick McKenna, executive director of the Maritime Exchange.

"Shippers are a conservative bunch. If there is no reliability at the ports of Los Angeles and Long Beach, they'll go someplace else," said Steve Getzug, a spokesman for the Harbor Employers Association, representing shippers and terminal operators in the labor talks.

Los Angeles Mayor Antonio Villaraigosa sent a letter to negotiators for both sides on Monday urging them to bring in a mediator to help resolve the dispute and to stay at the bargaining table around the clock until an agreement is reached.

The Harbor Trucking Association, representing 8,000 truck drivers, called on Monday for the Federal Maritime Commission to bring greater pressure to bear for a settlement.

Marathon negotiations over the weekend, capped by another exchange of proposals, failed to produce a breakthrough.

John Fageaux, head of the ILWU Local's clerical workers union, criticized management's negotiators for calling a break in the talks on Saturday night, saying, "We were prepared to bargain all night."

Getzug, of the employers association, said they were "trying to move this thing along as quickly as possible," and that the companies would welcome a mediator.

ILWU leaders are demanding that jobs traditionally performed by their members remain classified as union work and subject to the union's contract terms, even after employees holding them retire. The employers insist on reserving the right to fill only those jobs that need to be filled.

HOLIDAY-SEASON SHIPMENTS UNSCATHED

The ports of Los Angeles and Long Beach together handled more than $400 billion in goods arriving or leaving the West Coast by ship last year.

The two ports directly or indirectly support roughly 1.2 million Southern California jobs - workers involved in moving freight to or from the shipping complex, experts say.

A number of retailers told Reuters their holiday-season merchandise was already in the supply chain and that they were using other ports around the country as needed to divert incoming shipments.

Companies such as Lowe's and clothing retailer Aeropostale said they have yet to feel a pinch from the strike, though they were prepared to make adjustments as needed.

"We're asking ourselves why the striking union waited this long to act, when it would have had more leverage with a big threat to the holiday season," Caris & Co analyst Dorothy Lakner said in a research note.

Shippers agreed that it was mostly a wait-and-see game for now, though the season was in their favor.

The "peak transportation season for Christmas holiday has almost been over and it is weak season for container shipment now," Zhang Shouguo, chairman of the China Shipowners Association, told Reuters.

(Additional reporting by Jessica Wohl in Chicago, Dhanya Skariachan and Ben Berkowitz in New York and Yimou Lee in Hong Kong; Editing by Dan Whitcomb, Vicki Allen and Mohammad Zargham)