The closure of two Southern California ports underscores high-stakes union deal negotiations

A shortage of longshoremen at the ports of Los Angeles and Long Beach extended into the second day Friday, halting cargo traffic at the huge shipping complex while disrupting local economies and the global supply chain.

The seemingly temporary closure of the twin ports — a critical entry point for imports from Asia — has heightened fears over a logistical infrastructure that has never fully recalibrated since the delays of the COVID-19 pandemic and a strong national spotlight on the high stakes thrown labor negotiations in ports.

The union, which represents West Coast dockers, and the industry group, which represents maritime shipping, have been negotiating a new deal for several months, focusing in part on wages and the role of automation. The old contract, which covered more than 22,000 workers in 29 ports, expired on July 1, 2022.

The Pacific Maritime Association, the industry group that represents shippers at the negotiating table, said in a statement Friday that the International Longshore and Warehouse Union had taken “concerted action to restrain labor.”

“A majority of the last night shift positions remained vacant, including all positions for cargo handling equipment operators needed to load and unload cargo,” the statement said. “The workers who showed up were released because there were not all ILWU members to run the terminals.”

ILWU Local 13 said in a statement Friday afternoon that its members “still work hard and remain committed to moving the nation’s cargo.” The labor shortage is due to several thousand members attending a monthly meeting on Thursday evening and then observing the Good Friday holiday allowed under the contract, the union said.

Although both sides have been largely silent on the status of the contract negotiations – apparently sticking to an agreement laid out in a joint statement in February not to discuss the collective bargaining process in the media – the latest development underscored its importance.

“This is clearly a wake-up call for port operators,” said Harley Shaiken, professor emeritus at the University of California, Berkeley, who specializes in labor issues. “Not only was this process slow, it balanced the scales at very high stakes.”

With its members able to close ports all along the west coast, Shaiken says the dockers’ union has unprecedented power, especially given the size of the workforce.

“This has already caught the nation’s attention,” he said, “and should bring a sense of urgency to the negotiations.”

America’s busiest port complex

The ports of LA and Long Beach together handle almost 40% of US imports from Asia, which arrive in huge metal containers aboard ships that stretch nearly the length of the Empire State Building. But the movement of goods has plummeted in recent months, allowing the combined ports of New York and New Jersey to temporarily secure Los Angeles’ No. 1 bragging rights.

The local downward trend is worrying not only for officials in the twin ports, but also for 175,000 Southern California workers employed in the ports themselves and related businesses, who move $469 billion worth of cargo a year, port data shows. At stake are jobs along the entire supply chain, including truckers, warehouse workers and logistics specialists.

“It’s important that things get back to normal as soon as possible,” said Jock O’Connell, an international trade economist who noted that local ports have lost significant business to their East and Gulf Coast rivals. U.S. retailers and manufacturers have diverted cargo after a huge backlog in San Pedro Bay that began in 2020, benefiting from significant investment from competing ports trying to pull shipping business away from Southern California.

“It’s likely that some of that business will never come back,” said O’Connell, who works for Beacon Economics. The current disruption, he added, will create a ripple effect affecting myriad jobs and industries tangentially linked to freight movement through the region.

The “economic impact of this closure will be felt,” he said.

According to James Sterns, an associate professor in the Department of Applied Economics at Oregon State University, there is a precedent for contentious, protracted labor disputes that result not only in temporarily diverted deals, but also in more lasting change.

In 2016, for example, bitter labor disputes at the port of Portland eventually led to both of the port’s container terminal operators exiting the port for good.

In a statement Friday, Port of Los Angeles officials said they had been talking to both the union and the Pacific Maritime Association, as well as local, state and federal officials about returning to normal operations.

“Resuming cargo operations at America’s busiest port complex is critical,” the statement said, “to maintain the confidence of our customers and supply chain stakeholders.”

The National Retail Federation also released a statement on Friday, saying the retail group had raised concerns about the White House closure and called on administration officials to step in to prevent further disruption.

Last month, the association — along with dozens of other associations — sent a letter to President Joe Biden urging his administration to offer mediation services to both negotiating parties and to do everything in its power to ensure that an agreement is reached as soon as possible is achieved .

The economic importance of the ports of Los Angeles and Long Beach is great enough that US presidents have previously lobbied to get cargo moving again.

In 2002, President George W. Bush ordered an 11-day shutdown of 29 West Coast ports to stop employer lockouts of West Coast dockers. In 2021, ahead of the holiday rush of cargo traffic, Biden helped negotiate a plan to extend working hours at local ports in hopes of relieving bottlenecks that were growing severe amid the pandemic lockdowns.

The president, O’Connell said, is also likely overseeing the current hiatus.

“A Democratic president doesn’t like problems like that,” he said. “It’s a labor issue and President Biden will try to make sure this doesn’t get out of control.”

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