Shopper alert! Will labor strike at L.A. ports mean bare shelves?

At issue is a set of contracts that expired in June 2010. Union members say managers at many terminal companies have been clandestinely shifting jobs to lower-wage workers in other states and countries. The companies deny the allegations. The companies, for their part, want the new contracts to expressly rule out the requirement that jobs be provided or retained even if there is no work to perform – a pro-union practice known as featherbedding.

As the strike ripples down the logistic/supply chain, southern California truckers are among those starting to feel the pinch.

“With no goods to move, these drivers are literally sitting idle and getting no paychecks. After awhile, that begins to make a dent in the Christmas retail stores here, which aren’t benefitting from [the truckers'] purchases,” says Alex Cherin, executive director of the Harbor Trucking Association, which represents about 8,000 port drivers.

The strike began Nov. 27, when one of the smallest units of ILWU – with 800 members – walked off the job at the largest terminal operator at the Port of Los Angeles, APM Terminals Pacific Ltd. It expanded the next day when members of other unions chose not to cross picket lines. The strike has crippled the ports because of support from ILWU dockworkers, which has 50,000 members on the West Coast, Hawaii, and Canada.

Mr. Cherin has written to Mario Cordero, a member of the Long Beach Board of Harbor Commission, asking him to help end the impasse.

“As of today, the gates at most of the terminals in the San Pedro Bay Port complex are closed – preventing these 8,000 drivers from picking up containers and being compensated for their work. In turn, the warehousing and processing workers that stand downstream in the supply chain are being equally impacted,” says the letter sent Dec. 4. “In short, this closure continues to have a devastating impact on all facets of the maritime industry.”

The strike is affecting only terminals where the ILWU has contract disputes. Cruise ships, for instance, may still dock.

The ports have their own reasons for wanting the strike to be resolved. “We need to get a resolution to this because of the possible economic damage, not just because these goods aren’t delivered in time, but that all the workers down the line from here are affected,” says Phillip Sanfield, spokesman for the Port of Los Angeles. “And the unreliability of a port is an issue affecting where shippers want to bring their goods in the future.”

While disruptions at ports will stall deliveries, causing chaos and uncertainty for those moving and marketing inventories of jeans, jackets, and electronics for thousands of stores, some analysts caution against overestimating the overall dollar cost of a strike such as this one. It is wrong to assume that delayed or diverted cargo must be written off as if it will never be delivered, says Jock O’Connell, an international trade economist. The two ports do more than $300 billion in business a year. 

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