Ports across West Coast shut down amid labor dispute (+video)
As dockworkers and their employers negotiate contract terms, ports that manage about $1 trillion worth of cargo annually – including key West Coast locations – have been brought to a halt.
Almost all activity has come to a halt at West Coast ports on Thursday amid an ongoing labor dispute between dockworkers and their employers. After Thursday, which is a holiday for Lincoln's birthday, the ports are expected to also be closed over Presidents Day weekend – all days when workers would receive bonus pay.
Ships that had been scheduled to arrive in the ports on Thursday will have to wait until the workers return and the docks are cleared to unload merchandise. Groups of ships are currently waiting outside the ports of Los Angeles, Long Beach, and Oakland in California, and Seattle and Tacoma in Washington.
Freight backups have been most evident at the nation’s two busiest cargo hubs, the ports in Los Angeles and Long Beach. These ports account for 43 percent of all US container traffic. Overall, the stalled negotiations have affected activities in 29 ports, which manage almost a quarter of US international trade – about $1 trillion worth of cargo annually.
The Pacific Maritime Association (PMA), which represents about 70 shipping companies, and the International Longshore and Warehouse Union (ILWU), which represents about 20,000 dockworkers, have been negotiating a new contract since last May. While some of the biggest issues, including health care coverage and pensions, have been resolved, the talks are stuck over how to arbitrate future workplace disputes.
Yet even though each side accuses the other of stalling to gain leverage in negotiations, observers are confident that an agreement will soon be reached.
“They are working through it,” Jon Slangerup, chief executive of the Long Beach port, told Reuters in an interview in New York. “It could be today. They could make an announcement tonight, saying, ‘We’re there.’ ”
Meanwhile, however, the PMA claims the union is responding to company offers with demands that are impossible to meet. It claims the workers have staged slowdowns and stoppages that have disrupted cargo movements and led to congested conditions. Workers have denied staging slowdowns.
The four-day shutdown has come at the behest of the companies, which do not want to pay employees bonuses for working weekends and holidays.
It's like "they're getting paid to grind us into the ground," PMA CEO James McKenna told CNBC. Mr. McKenna said productivity had dropped between 30 and 50 percent since November, bringing entire strings of vessels to a stop.
But union representatives say the PMA’s claims are “totally inaccurate” – that the companies are exaggerating the scale of the crisis to cut shifts and pressure negotiators into an agreement.
“This is an effort by the employers to put economic pressure on our members and to gain leverage in contract talks,” Robert McEllrath, ILWU president, said in a written statement, according to Reuters.
Nevertheless, union representatives say they remain committed to continuing the talks.
"The union is standing by ready to negotiate, as we have been for the past several days," Mr. McEllrath concluded.