Shipper, business groups join call for White House intervention to end port strike at L.A., Long Beach

On the eighth day, the universe of commerce finally got involved.

A cross-section of heavy-hitters—such as the National Industrial Transportation League, the American Trucking Associations, the U.S. Chamber of Commerce, the Intermodal Association of North America, and the National Customs Brokers & Freight Forwarders Association—today joined with nearly 90 other groups pleading with President Obama to immediately intervene to end an eight-day strike by clerical workers that has shut down the Port of Los Angeles, the nation's busiest port, and dramatically curtailed operations at the adjacent Port of Long Beach, the second-busiest.

Until today, the National Retail Federation, which represents the nation's largest retailers, had been virtually alone in its public expressions of concern over the walkout. But as the work stoppage persists and with the nation's largest port complex effectively paralyzed with 10 of 14 terminals closed, today's letter makes it apparent that it has begun to affect more than just the retail trade.

In the letter, the organizations asked the Administration to use "whatever means necessary" to bring the strike to a quick end. President Obama can invoke the 1947 Taft-Hartley Act to order the ports immediately reopened and the strikers back to work. The law calls for an 80-day cooling-off period to allow commerce to resume flowing and give the two sides time to resolve their dispute. The 800-member clerical unit of the International Longshore & Warehouse Union (ILWU) has been working without a contract for more than two years.

President George W. Bush invoked Taft-Hartley in October 2002 to end a 10-day coast-wide lockout by West Coast waterfront management that cost the U.S. economy $1 billion a day and disrupted supply chains nationwide at the peak holiday shipping season. By contrast, Office Clerical Unit Local 63 is striking at a time when most holiday goods are already in U.S. commerce, and retailers are still a week or two away from the last big order push before Christmas.

However, with inventories at record lows relative to sales and with retailers pressured to keep shelves stocked up until Dec. 24, there is worry that a continuing job action would begin to wreak massive havoc on supply chains and, by extension, Christmas sales.

The letter said ships are now being diverted to Canada and Mexico instead of to other West Coast ports because of concern of widening labor action should vessels try to call other U.S. facilities. Meanwhile, ships are stacking up in the harbor outside the port complex, and terminal operators are running out of room to store containers and other intermodal equipment, the groups said.

As of late morning, 13 ships were idling in the waters outside both ports, and 17 ships have been diverted, according to Phillip Sanfield, a spokesman at the Port of Los Angeles.

"Even if labor returned to work today, it would take several weeks to undo the gridlock this disruption has already set in motion," the groups said in the letter to the president.

An industry source said he was told on Monday by an executive of a major retailer that even if the company's containers reached another port, it would not have its regular de-consolidator available to sort, segregate, and ship the goods in time to reach its stores by Christmas. The source said the executive told him the company "would be playing 'catch-up' from now until Christmas." The source would not identify the executive or the company.

Union Pacific Corp., (UP) one of the two major western railroads serving the ports, said yesterday it has embargoed all westbound U.S. traffic destined for its international container facility at Long Beach as well as all on-dock locations at both ports supporting international traffic. Burlington Northern Santa Fe Railway, the other big western railroad, was not available to comment.

David Howland, vice president, land services, for third-party logistics giant APL Logistics, said in a Dec. 1 e-mail that the strike has kept containers at the ports from being removed from UP's cars for on-dock handling and prevents Los Angeles-bound shipments in UP's network from even moving to the docks.

Howland said at the time that UP was holding trains in multiple staging areas until the strike ends. Howland was unavailable for comment today on whether the situation had changed since the weekend.

GENESIS OF THE STRIKE
The clerical unit struck in protest over the Los Angeles/Long Beach Harbor Employers Association's (HEA) alleged attempt to outsource clerical jobs. The unit claimed that management has eliminated 51 permanent clerical jobs in the past five years and that an additional 76 jobs are poised to be sent overseas.

The HEA has dismissed the unit's claim, saying the individuals whose jobs were purportedly wiped out had 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," HEA said last week. "There simply has not been a business need for replacing these workers."

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 management group said the unit wants to restore "featherbedding," where workers are hired to perform jobs that are largely unnecessary. As part of its strategy, the clerical unit insists on having control over staff levels, management said.

The unit's members are already the country's highest paid clerical workers, according to management. HEA said the latest proposal would bring workers' wages up to near $90,000 a year and annual pensions up to nearly $75,000.

Talks aimed at reaching a new contract broke off in October.