Little Time Left to Avoid Port Strike That Could Cripple Shipping

Friday, 28 Dec 2012 07:10 AM

 

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Shipments of products as varied as flat-screen TVs, sneakers and snow shovels could sit idle at sea or get rerouted, at great time and expense, if more than 14,000 longshoremen go on strike as threatened — a wide-ranging work stoppage that would immediately close cargo ports on the East Coast and the Gulf of Mexico to container ships.

Commerce could be brought to a near standstill at major ports from Boston to Houston if the strike takes place on Sunday, potentially delivering a big blow to retailers and manufacturers still struggling to find their footing in a weak economy.

"If the port shuts down, nothing moves in or out," said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation. And when the workers do return, "it's going to take time to clear out that backlog, and we don't know how long that it's going to take."

The 15 ports involved in the labor dispute move more than 100 million tons of goods each year, or about 40 percent of the nation's containerized cargo traffic. Losing them to a shutdown, even for a few days, could cost the economy billions of dollars.

In addition to transporting goods, U.S. factories also rely on container ships for parts and raw materials, meaning supply lines for all sorts of products could be squeezed.

"The global economy moves by water, and shutting down container ports along the East and Gulf coasts while the national economy remains fragile benefits no one," Deborah Hadden, acting port director at Massport, the public agency that oversees shipping terminals in Boston. It is not a part of the contract dispute.

Florida Gov. Rick Scott said "the livelihood of thousands of Florida families lies in the balance."

The master contract between the International Longshoremen's Association and the U.S. Maritime Alliance, a group representing shipping lines, terminal operators and port associations, expired in September. The two sides agreed to extend it once already, for 90 days, but they have so far balked at extending it again when it expires at 12:01 a.m. Sunday.

The union said its members would agree to an extension only if the Maritime Alliance dropped a proposal to freeze the royalties workers get for every container they unload. The Alliance has argued that the longshoremen, who it said earn an average $124,138 per year in wages and benefits, are compensated well enough already.

Federal mediators have been trying to push negotiations along, but there has been no word from either side on the progress of the talks since Dec. 24. As recently as Dec. 19, the president of the longshoremen, Harold Daggett, said the talks weren't going well and that a strike was expected.

The work stoppage would not be absolute. Longshoremen would continue to handle military cargo, mail, passenger ships, non-containerized items like automobiles, and perishable commodities, like fresh food.

Joseph Ahlstrom, a professor at the State University of New York's Maritime College and a former cargo ship captain, called container ships the "lifeblood of the country."

"We don't fly in a lot of products. It's just too expensive," Ahlstrom said. "The bulk of the products we import come in inside containers."

The White House has weighed in on the issue, urging dockworkers and shipping companies Thursday to reach agreement "as quickly as possible" on a contract extension. Obama spokesman Matt Lehrich said the administration is monitoring the situation closely.

If it happens, the walkout could be the biggest national port disruption since 2002, when unionized dockworkers were locked out of 29 West Coast ports for 10 days because of a contract dispute.

The ports only reopened after President George W. Bush, invoking powers given to him by the 1947 Taft-Hartley Act, ordered an 80-day cooling-off period. Some economists estimated that each day of that lockout cost the U.S. economy $1 billion. It took months for the retail supply chain to fully recover.

An East Coast port freeze would have its biggest impact at the Port Authority of New York and New Jersey, where 3,250 longshoremen handled 32.3 million tons of cargo in 2010. The authority is not a party to the contract dispute.

Other major ports affected would include Savannah, Ga., which handled 18 million tons, and Houston and Hampton Roads, Va., which each handled more than 12.5 million tons.

Thousands of other jobs would be directly affected by the shutdown. Truck drivers might not have any cargo to transport, tug boat captains no ships to guide and freight train operators nothing to haul.

Simultaneously, another labor dispute involving dock workers was playing out on the West Coast.

Longshoremen at several Pacific Northwest grain terminals worked Thursday under contract terms they soundly rejected last weekend. The owners implemented the terms after declaring talks at an impasse. The International Longshore and Warehouse Union has yet to announce its next move.

Workplace rules, not salary and benefits, have been the obstacle to a new deal.

The dispute involves terminals in Portland, Ore., Vancouver, Wash., and Seattle, where longshoremen have been working without an agreement since the last contract expired Sept. 30.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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