Freight at a Standstill as Container Shipping Blocked by Strike

US – The dispute which has effectively closed the ports of Long Beach and Los Angeles to freight traffic looks set to continue after non stop negotiations have failed to persuade clerical staff to return to work. The latest news we have indicates that three out of six container terminals at Long Beach and seven from eight in L.A. were at a standstill will other office staff refusing to cross picket lines whilst shipping lines waited in frustration for a resolution.

Several container vessels from Asia, too large to discharge at any nearby ports, are reported as moored up in Californian waters awaiting unloading and with strikes narrowly averted in the East Coast ports in September when a three month cooling off period, due to expire on News Years Day, was introduced things are not looking hopeful as each side cranks up the rhetoric.

The dispute began when members of the 800 strong International Longshore and Warehouse union (ILWU) local 63’s Office Clerical Unit (63-OCU) walked out at the Port of Los Angeles largest container handling facility, APM Terminals Pacific, last Tuesday the 27th November protesting that they had given up trying to negotiate an agreement with big international carriers and terminal operators following more than two years of promises, since their three-year contract expired on June 30, 2010.

Other workers quickly joined in the following day and their principal complaint is that the employers have been outsourcing full time jobs to part time workers and passing certain contracts overseas to cheaper alternatives. 63-OCU President John Fageaux noted that at least 51 permanent positions during the past 5 years had been lost from the harbour community and that the employers have announced plans to take away another 76 in the future saying:

“We’ve been meeting with the companies for more than two years, but they’re still concealing their outsourcing – even when they’ve been caught red-handed. These employers seem to have an insatiable appetite for outsourcing.

“It’s not about wages and benefits, it’s about outsourcing and the future of good jobs in America and our Harbor communities. We just reached the point where somebody had to stand-up and draw the line against outsourcing, because these companies will eventually take all the good jobs.”

ILWU International Vice-President Ray Familathe was equally scathing in his comments about employment practices, particularly the fact that many of the computer based operations undertaken by the clerical staff could easily be performed anywhere in the world saying:

“This outsourcing isn’t being done by little mom-and-pop operations; these are powerful multi-national corporations who aren’t respecting the local communities, these guys can outsource a good-paying job to Taipei with the push of a button, and seem to care less how it impacts a family living in the Harbor area.”

For their part the management negotiation teams have been critical of wasteful employment practices and accusing the unions of ‘featherbeddding’ ensuring both temporary and permanent staff were employed even when they had little or nothing to do.

Although the strike has come too late to maximise the effect on a busy seasonal trade the divisions appear to be deep and the timing is bad for American trade because of the potential of more disputes on the East Coast where the damage inflicted by Hurricane Sandy is still affecting logistics in some areas. As ever the President could step in to order a cooling off period under what used to be known as the ‘slave labor bill’, the Taft Hartley act which gives Mr Obama the power to suspend the dispute whilst both sides negotiate.

Should this become necessary and such action be taken this week there would be a suspension of strike action lasting until late February 2013 but with tempers running high and the Christmas Holidays between even that amount of time might prove insufficient to settle this dispute unless some serious negotiations produce a mutually acceptable solution.

It has been estimated that goods worth around $1 billion a day pass though the box terminals concerned in the strike which has led to the usual hysterics from mainstream press that that is the amount which the dispute is costing the US every day. Whilst this is not the case the principal effect will be on support industries, particularly the road haulage operators and drivers who will be left idle whilst industrial action continues and with the real possibility that some shippers will be actively searching for more reliable, even if costlier, alternative routes.

Photo: The striking union may only have 800 members but concerted action has enabled them to punch above their weight in this dispute.

N.B Negotiation updates are available on the APM Terminals Pacific link above.