Billions at risk as West Coast port contract ends

Published on NewsOK Modified: June 23, 2014 at 1:37 am •  Published: June 23, 2014

LOS ANGELES (AP) — The West Coast ports that are America's gateway for hundreds of billions of dollars of trade with Asia and beyond are no stranger to labor unrest and even violence.

Now, the contract that covers nearly 20,000 dockworkers is set to expire, and businesses that trade in everything from apples to iPhones are worried about disruptions just as the crush of cargo for the back-to-school and holiday seasons begins.

With contentious issues including benefits and job security on the table, smooth sailing is no guarantee.

On one side is the International Longshore and Warehouse Union, with its tradition of fierce activism dating to the Great Depression, when two of its members were killed during a strike. On the other is the Pacific Maritime Association, which represents shipping lines and operators of terminals at 29 West Coast ports.

Both acknowledge that they are unlikely to agree on a new contract before the current one expires June 30, but they plan to negotiate past that deadline. That would fit the pattern from contract talks in 2008 and 2002. In 2002, negotiators didn't reach an agreement until around Thanksgiving, following an impasse that led to a 10-day lockout and a big disruption in trade.

The union's total control over the labor pool means huge bargaining leverage, which negotiators have parlayed into white-collar wages and perks for blue-collar work. A full-time longshoreman earns about $130,000 a year, while foremen earn about $210,000, according to employer data. Workers pay nearly nothing for health coverage that includes no premiums and $1 prescriptions.

Neither side has publicly discussed progress on negotiations that began May 12 in San Francisco, which is headquarters to the union and the maritime association.

Twelve years ago, the shutdown had a lasting impact on how products moved in and out of the United States. Hulking cranes idled. Ships anchored in San Francisco Bay and outside ports from Los Angeles to Seattle. Economists estimated the impact at $1 billion each day.

Even after trade resumed, retailers — with their just-in-time supply chain — worried that West Coast ports risked becoming a bottleneck. Companies looked to Gulf Coast and East Coast ports, which courted them by upgrading facilities.

"They can't afford to have their goods hung up either out on the sea or on the docks," said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.

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