Clerical workers have gone on strike at the busiest of the Port of Los Angeles' nine container terminals, the APM Terminal. The move raises the specter of a wider job action at a time when a large quantity of goods are on the water heading to the nation's biggest container port.
Eight hundred members of the International Longshore and Warehouse Union's (ILWU) Local 63 Office Clerical Unit walked off their jobs yesterday to protest what they say are ship management's ongoing job outsourcing activities. Other ILWU members working at the terminal are honoring the strike and in the process, have closed the terminal.
Currently, the strike is confined to the APM Terminal at Pier 400. All other terminals are operating normally, according to a port spokesperson.
The unit's members do clerical work for shipping agencies and terminals and are employed by 14 terminal companies and 14 steamship lines. The unit has been working without a contract since the last contract expired in June 2010. Talks aimed at reaching a new agreement broke off last month.
John Fageaux, the unit's president, accused ship management of having an "insatiable" appetite for outsourcing clerical workers. Fageaux claimed in a statement that 51 permanent positions have been eliminated in the past five years and that an additional 76 jobs are poised to be sent overseas.
In a statement, the Harbor Employers Association said the two sides are at loggerheads over the unit's insistence on having control over staff levels. The group said that the members are already the country's highest paid clerical workers and that management's current contract proposal would bring workers' wages up to near $90,000 a year and annual pensions up to nearly $75,000.
According to the association, management has guaranteed that no unit member will be laid off during the life of the contract. The group said employers have no incentive to outsource work since they are "obligated to pay...employees whether there is work to do or not."
The group also dismissed the unit's claim of the outsourcing of the 51 jobs, saying the individuals were those who retired with full benefits, quit, or died during the past three years. "Not one of the 51 job positions they identify has been given to a nonunion employee or subcontracted away," according to the statement. "There simply has not been a business need for replacing these workers."
David G. Ross, transport analyst for investment firm Stifel, Nicolaus & Co., said in a note today that the real threat to cargo flows would occur if the strike spreads to the port's other terminals and more cargo is delayed. If that scenario becomes a stronger possibility, retailers will have about one week to determine whether goods already en route will make it to store shelves in time for the pre-holiday rush. If they won't, retailers will have to substitute more expensive airfreight to hit their delivery targets, Ross said.
Regardless of the outcome, Ross said, ports should be making long-term plans to shift to electronic processing given the mountain of information already being electronically transmitted across the ocean supply chain. Further labor unrest, he said, could accelerate the conversion.