L.A. Ports Shut Off Imports & Exports in Costly Labor War
The ports of Los Angeles and Long Beach, the nation's busiest and America's front door to the crucial commerce of the Asia-Pacific region, will today cease trade operations as a result of a labor dispute with dockworkers. Loading and unloading was halted last weekend, too.
Craig Merrilees, a spokesman for the International Longshore and Warehouse Union, previously estimated that such shutdowns cost $1 billion a day in lost revenue. One research firm says the cost to the U.S. economy could be closer to $2 billion a day as goods float on the Pacific without a way to get to warehouses and retailers.
The Pacific Maritime Association, which represents all 29 West Coast ports in negotiations with the longshoremen, says loading and offloading operations will cease today, Saturday, Sunday and Monday—all days for which dockworkers would be paid a 50 percent premium. Today is Lincoln's birthday and Monday is Washington's birthday.
The PMA says longshoremen have been conducting work slowdowns that have resulted in a backlog of dozens of ships with millions of dollars worth of cargo sitting outside the L.A. County ports. Contract negotiations between the two parties have been ongoing, with the union saying the sides are "very close to an agreement."
The ports organization argues that paying weekend and holiday rates for the union's work tactics is a sucker's game, however.
Real estate research and facilities research firm CBRE told us the slowdown has resulted in West Coast ports running at 50 to 60 percent of capacity. About thirty ships remain offshore, and the wait for unloading is 45 to 60 days, the firm said.
The West Coast ports handle nearly half (44 percent) of U.S. container traffic and account for 12.5 percent of U.S. economic output, CBRE says. The firm estimates shutting down trade could cost as much as $2 billion a day. A 10-day shutdown in 2002 cost the American economy an estimated $1 billion a day.
PMA spokesman Wade Gates says the organization doesn't want to pay for work slowdowns, especially on weekends and holidays:
Last week, PMA made a comprehensive contract offer designed to bring these talks to conclusion. The ILWU responded with demands they knew we could not meet, and continued slowdowns that will soon bring West Coast ports to gridlock. What they’re doing amounts to a strike with pay, and we will reduce the extent to which we pay premium rates for such a strike.
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Weekend and holiday pay rates were described by the association as ranging from $54 per hour for longshore workers and clerks up to $92 per hour for foremen.
The PMA says the union is demanding a deal breaker of a concession, the ability to file any arbitrator who rules against it in contract talks. The demand would "cripple" the West Coast ports, the association says.
The ports' offer on the table, according to the association, includes average pay of $147,000 per year for ILWU workers, fully paid health care worth an additional $35,000 a year, and an increased pension plan worth as much as $88,000 per year.
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The median per capita income in Los Angeles County is $27,749.
Some local politicians including South Bay state Sen. Isadore Hall and San Pedro area city Councilman Joe Buscaino, support the ILWU in the dispute.
Hall said earlier this week that the PMA was endangering the state's economy and engaging in a battle that's a threat to the nation's fiscal security. "The "PMA has entered into a very dangerous and unnecessary game," he said.
ILWU spokesman Craig Merrilees told us earlier this week that the PMA was wielding the shutdowns as an "economic terrorism tactic." He said this whole thing could be easily resolved at the bargaining table.