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Federal mediators have been brought in to try to resolve the eight-day strike that has crippled the Ports of Los Angeles and Long Beach, stranding goods at the apparel industry’s busiest point of entry for imports.
This story first appeared in the December 5, 2012 issue of WWD. Subscribe Today.
Los Angeles Mayor Antonio Villaraigosa said Tuesday that the 800-member International Longshore & Warehouse Union Local 63 Office Clerical Unit and the Harbor Employers Association have agreed to federal mediation of their contract dispute.
George Cohen, head of the Federal Mediation & Conciliation Service, was expected to arrive on Tuesday, but the strike will continue until an agreement has been reached.
The mayor, noting that 44 percent of seaborne container goods that enter the U.S. come through the twin ports, said it was important to get them operating again in order to compete with Panama, which is near completion of a major expansion. Currently, 10 of the 14 container terminals at both ports have been closed and ships are either idling outside the docks or being diverted to Oakland, Calif., Mexico or Panama.
“It is clear to me the parties need a mediator to help them…come up with a creative solution that will get us back to work,” Villaraigosa said at a press conference “We are looking at almost 20,000 people impacted by this, from the truckers and longshoremen and related businesses.”
While some expect a quick resolution, Villaraigosa said, “It is still clear to me that we are some bit apart, but there has been movement.”
The Los Angeles ports are the busiest in the country, supporting 896,000 jobs in the region, 1.2 million jobs in California and 3.6 million U.S. jobs. It has been estimated that cargo worth almost $1 billion a day has been stranded outside of the ports or diverted elsewhere.
Earlier Tuesday, a coalition of 98 major trade organizations sent a letter to President Obama, Cabinet officials, members of Congress, Villaraigosa and Long Beach Mayor Bob Foster calling on them to do whatever is necessary to get workers back to work at the ports, even if it meant invoking the Taft-Hartley Act. That law allows the President to end a strike or lockout if it poses a “threat to national security.”
President George W. Bush did just that in October 2002 when the Pacific Maritime Association locked out ILWU workers from West Coast docks.
The strike began last week when ILWU workers, who have been working without a contract since June 2010, walked out of negotiations with the Harbor Employers Association, saying its primary concern is that it will lose jobs through attrition and employers will outsource new jobs to nonunion workers.
“In the past six days, ocean carriers have begun to divert cargo to Mexico and Canada because there is great concern that diverting cargo to other U.S. ports would only widen the labor actions,” the trade group coalition said in the letter. “Meanwhile, ships are beginning to back up in the harbor and port terminal operators are running out of room to store empty containers and other intermodal equipment. Even if labor returned to work today, it would take several weeks to undo the gridlock this disruption has already set in motion.”
The coalition warned of dire consequences if a resolution is not reached quickly. They said manufacturers using imported inputs will soon have to idle operations, exporters will fail to meet delivery times for their Asian customers, agricultural companies will have to divert production to domestic use, retailers will be unable to replenish inventories quickly, and importers, wholesales and brands will face cancellations if they cannot meet delivery dates.
The letter follows on the heels of others that have been sent in the past week by the National Retail Federation, Retail Industry Leaders Association and the American Apparel & Footwear Association.
Meanwhile, East Coast port talks, also being supervised by the Federal Mediation & Conciliation Service, are continuing, according to James A. Capo, chairman and chief executive officer of the U.S. Maritime Alliance (USMX). The USMX and International Longshoremen’s Association agreed in September to extend their collective bargaining agreement covering East and Gulf Coast port workers for 90 days through Dec. 29.
The extension was welcome news for retailers stocking shelves for the holidays. The two sides have been in contract talks since March. In 2011, the 14 ports handled more than 110 million tons of cargo.