Businesses fret after western ports shutdown
- Published Tuesday, October 1, 2002, in the New York Times
Businesses Fret After Shutdown of West's Ports
By Steven Greenhouse
SAN FRANCISCO -- Cargo ships waited offshore today and factory owners
worried about parts shortages as port operators from Seattle to San
Diego shut down 29 West Coast ports in a dispute with the
After five months of contentious negotiations over a new contract, the
operators said they were compelled to shut the ports indefinitely
because of what they said was a longshoremen's slowdown that was
The union called the shutdown an unjust lockout of 10,500
Economists and political leaders voiced fears that a long shutdown of
the ports, which handle $300 billion in cargo a year, could hurt a
broad swath of businesses. Retailers complained that the shutdown
would make it hard to stock shelves for the holiday season, auto
dealers said they might soon run out of some popular Japanese cars,
and farmers said fresh produce meant for export would soon rot.
"Obviously, this is a major economic disaster for U.S. importers and
exporters that represent a substantial portion of the nation's
economy," said Robin Lanier, executive director of the West Coast
Waterfront Coalition, a group that includes Wal-Mart, Kmart, Toyota
and dozens of other major importers. "This shutdown is having an
immediate impact. We are at the brink of an assembly line shutdown in
The West Coast ports handle about half the nation's imports and
The Bush administration said it was monitoring the shutdown, which
some economists say will cost the economy $1 billion a day for the
first five days, with the cost rising exponentially if it lasts
"If it goes on for even a short period of time, it's a problem for the
economy," said Ari Fleischer, the White House spokesman. "We're
monitoring it carefully."
The longshoremen's union, the International Longshore and Warehouse
Union, denounced the employers' group for closing the ports, insisting
that management was putting the nation's economy at risk. But the
Pacific Maritime Association, a group of shipping lines and port
operators, said the longshoremen had been staging a slow-motion strike
and were to blame for hurting the ports and the economy.
At a news conference at union headquarters here, James Spinosa, the
union's president, acknowledged that longshoremen had slowed
operations by refusing to work overtime, by not assigning experienced
workers to huge cranes and by seizing on safety issues to slow their
normal rate of work. He said the union was being more cautious about
safety because five longshoremen died on the job over the past year.
In Portland and Oakland, the employers' association said, crane
operators over the last few days were loading and unloading less than
half the 30 large metal cargo containers that they normally unload per
Joseph Miniace, president of the employers' association, said it would
not reopen the ports until the union agreed to resume work normally
and extend its contract. The union's three-year contract expired on
July 1, but the union repeatedly agreed to temporary extensions until
Labor Day weekend when it refused further extensions.
The employers have agreed to meet with federal mediators this
Thursday, but union officials said they were not ready to meet with a
mediator. The two sides resumed negotiations for a short time today,
evidently making little progress, and said they would meet again on
Mr. Spinosa said the longshoremen would not extend the contract until
management met the union halfway on the central issue in the
negotiations -- management's desire to use new technologies.
"The I.L.W.U. will not be intimidated," Mr. Spinosa said. "We will not
move into a contract that is not desirable for our workforce."
Among the ports, Portland specializes in importing cars from Asia and
exporting grain from the Midwest. Seattle imports a range of goods
that go to the Midwest and elsewhere in the country.
Los Angeles and Long Beach, the nation's two busiest ports, handle a
wide range of cargo, with much of their imports sold in the West and
much of their exports produced in the region.
Industry officials said it would be difficult to divert the West
Coast-bound ships to Atlantic or Gulf Coast ports because Pacific
cargo ships were generally too large to go through the Panama Canal.
American exporters said the shutdown could be disastrous. Charlie Woo,
the president of Mega Toys, which is based in Los Angeles, said: "I
got a lot of stuff stuck on a boat right now. In terms of Christmas
delivery, this is really the two-minute warning. This is crunch time."
Andrea Greco, vice president of supply for Fila USA, the footwear
company, voiced concern that a shutdown would delay shipments until
too late in the holiday season. "Past a certain date, they really
don't want to take the product," Ms. Greco said.
Off the port of Long Beach, at least 20 hulking cargo ships waited
silently, while inside the harbor, scores of cranes, each at least 10
stories high, stood idle.
Many longshoremen -- whose pay runs from $80,000 to $158,000 a year --
voiced anger and frustration that management had shut the
ports. Joseph Hanson, a longshoreman for 35 years, said: "We've been
working without a contract for three months. We've been working in
good faith. They're talking about good faith. There ain't no good
Management wants to introduce new technologies to speed
cargo-handling, like using optical scanners to register the cargo that
truck drivers carry into the ports. Even though the employers have
promised job security to the longshoremen, the union has balked at
accepting such new technologies because it worries that some jobs will
But management officials said the union's rejection of new
technologies would hurt the ports' expansion. "On the issue of
technology, the union cannot put its head in the sand," Tom Edwards,
Northern California director of the maritime association, said at a
news conference at a San Francisco hotel. "The lack of technology is
already creating severe bottlenecks at the ports, and there's no
chance that we will be able to accommodate the expected trade growth
from Asia without it. The top ports in Asia and in Europe are at least
a decade ahead of us."
The last major work stoppage at the West Coast ports was a 134-day
strike in 1971.
In the last two rounds of negotiations, in 1996 and in 1999,
management largely bowed to the union's demands after the longshoremen
refused to work overtime and slowed down operations in other
ways. Management officials said that the port operators and shipping
lines decided not to let themselves be pushed around this time.
Mr. Miniace said slowdowns are more disruptive than a full-scale
strike because they throw off scheduling for arriving ships, for
trucks that pick up and deliver cargo and for factories that rely on
just-in-time arrival of components for production.
Calling the employers' move "a defensive shutdown," Mr. Edwards said,
"When you reduce production in all the West Coast ports by 50 percent,
that's a strike, and they're trying to get paid for it when they can."
Last summer, Bush administration officials said they were thinking of
ordering an 80-day cooling off period in the event of a work stoppage
-- the first time such a Taft-Hartley order would be used since a 1978
coal strike. Union officials accused the administration of tilting
toward management, but in recent weeks the administration has
soft-pedaled talk of a cooling-off period.
Of all the states, Hawaii is likely to be hurt most by a prolonged
shutdown because it imports more than 90 percent of its goods.