Billions at Stake as West Coast Ports Shut Down
UPDATE: The ports of Los Angeles and Long Beach have ceased trade operations as of February 12 as a result of a labor dispute with dockworkers.
In what could amount to a $1 billion a day loss in economic activity, the operators of all 29 West Coast say they're shutting down loading and unloading operations for the weekend.
The temporary suspension is a response to an ongoing contract dispute with dockworkers, whom operators say have been conducting job slowdowns so severe that it's better to close up shop than pay them to loaf. "It makes no sense to pay extra for less work,” said Wade Gates of the Pacific Maritime Association (PMA), which negotiates contracts with dockworkers represented by the International Longshore and Warehouse Union (ILWU).
The West Coast shutdown will affect the busiest ports in the United States, those of Los Angeles and Long Beach.
A full West Coast suspension of operations hasn't happened since 2002, when a 10-day shutdown cost an estimated $20 billion in lost revenue, Craig Merrilees, a spokesman for the ILWU, told us. He said he believes this shutdown could be worth $1 billion a day.
That 2002 suspension was also a reaction to a labor disagreement.
The PMA calls this a partial shutdown, because yard, rail and gate operations will continue "at terminal operators’ discretion," according to a statement from the association. "Processing containers and moving them for rail and truck delivery to customers can continue through the weekend at terminal operators’ discretion," Gates explained to us.
He said weekend loading and unloading at time-and-half "premium pay" made no sense "if there is no end in sight to the union’s actions which needlessly brought West Coast ports to the brink of gridlock."
Both sides agree the labor dispute will have widespread economic effects. Gates:
The ongoing ILWU slowdowns have created delays and backlogs up and down the West Coast, and there’s been resonant economic harm – from growers in Washington and California who can’t get their crops on ships and off to foreign markets, to businesses that are experiencing long delays in receiving goods, or manufacturers who have had to airlift parts.
Merrilees of the dockworkers union called the shutdown "reckless and irresponsible."
"This ... looks more like an economic terrorism tactic than good-faith bargaining," he told us. "We have to resolve our differences at the bargaining table. Those differences are now very small, and we're very close to an agreement."
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Workers have not shut the ports down since 1971, he said.
"Vessel operations are scheduled to resume Monday," PMA said in a statement.
South Bay state Sen. Isadore Hall is not happy with the suspension of loading and unloading, calling it a threat to the nation's economic security. He blames the PMA, and he clearly sides with the longshoremen:
The PMA has entered into a very dangerous and unnecessary game. California’s and the United States’ economic security is no game - it is central to our national security and to the economic wellbeing of nations and continents throughout the world. I demand that the PMA reconsider its decision to suspend port activity this weekend, reopen our ports, re-enter into good faith negotiations with ILWU, Local 13 and stop being a barrier to California’s economic recovery.
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