Bush Acts on Docks, But Retailers Facing A Six-Week Backlog

WASHINGTON — Retailers and other importers will soon be getting their cargo unloaded from the West Coast ports, after a federal judge Tuesday afternoon approved President Bush’s plan to get the dock workers back on the job.<br><br>Judge...

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WASHINGTON — Retailers and other importers will soon be getting their cargo unloaded from the West Coast ports, after a federal judge Tuesday afternoon approved President Bush’s plan to get the dock workers back on the job.

This story first appeared in the October 9, 2002 issue of WWD.  Subscribe Today.

Judge William Alsup in San Francisco ordered union members back to work at the 29 ports and an 80-day cooling off period under the Taft-Hartley Act, as Bush requested Tuesday afternoon. A hearing was held in U.S. District Court in San Francisco at 4 p.m., Pacific Standard Time.

Tracy Mullin, president and ceo of the National Retail Federation, said once the ports reopen, it will take a while to dispense with the cargo backlog.

“Even if the dock workers go back to work [Wednesday], it’s going to take four to six weeks to move this merchandise from the docks to the stores and that’s cutting it very close,” Mullin said.

Robin Lanier, executive director of the West Coast Waterfront Coalition, which includes several major retailers, called the situation “a national emergency.”

Until the last minute, Bush administration officials were frantically trying to forestall the President having to intervene in the bitter labor-management stalemate that’s idled ports for more than a week, cost the economy at least $7 billion and stranded holiday-season cargo, including significant amounts of apparel.

The International Longshore and Warehouse Union accepted an administration proposal made Tuesday to return to work under a 30-day contract extension. However, the shippers’ Pacific Maritime Association rejected the idea.

“That is nothing but a Band-Aid on a serious wound,” PMA president Joseph Miniace said in a statement.

News the ports would soon open moved quickly through the fashion industry, which has seen holiday inventories stranded on ships, left on docks and detoured to Mexico. The docks would open because Bush invoked the 1947 Taft-Hartley Act, which calls for the cooling-off period and for contract mediation to continue. For many importers, Bush’s action was their last hope.

“We are very much relieved,” said Peter McGrath, vice president at J.C. Penney Co. “It’s reasonable to assume that all of our goods tied up in the port [shutout] will be on the shelves and in stores by Thanksgiving.”

McGrath said other major retailers should escape with minimal disruption as well.

“If the lockout had gone into November, it would have been a different picture,” he added.

However, vendors may not be as lucky.

Alden Halpern, chief executive officer of Chatsworth, Calif.-based 4 Whatitsworth Inc., parent company of denim label Tyte, said he has already diverted four shipments to the East Coast and will continue to do so for the next month because of the backup. He said he has one container of fashion denim stranded at port.

The whole situation “sure shows you how vulnerable we are,” Halpern said.

He did have some goods news: Retailers haven’t canceled orders and will extend the delivery times if he can provide the documents verifying the goods were stranded in the ports.

Susan Merritt, merchandise manager of The White House and Black Market chain of 96 women’s specialty stores based in Glen Burnie, Md., said she was relieved Bush intervened.

“This is the first week we are really feeling the crunch,” said Merritt, who heard the news while at the California Market Center in Los Angeles shopping for contemporary apparel. “There’s a lot of [our] time-sensitive outerwear sitting at the ports.”

Anticipating Bush’s decision to seek an injunction to force the ports open, the PMA ordered union dispatchers to be prepared to work as early as Tuesday afternoon. International Longshore and Warehouse Union officials, unhappy with Bush’s move to seek a court order, said their members would nonetheless cooperate with a judge’s back-to-work decision. An ILWU spokesman called Taft-Hartley “an attack against working people.”

Bush acted after little progress was reported from a federal mediator who has been trying to broker a new labor contract that expired in July. Things have been particularly heated since management locked labor out of the ports more than a week ago. The closure is estimated to have cost the economy between $1 billion to $2 billion a day.

Bush called the port shutdown a “crisis” that’s hurting the national economy and defense.

“I have determined that the current situation imperils our national health and safety,” Bush said. “This injunction will allow the parties more time to resolve their differences. It is not, however, a permanent solution to the problem. And the federal government will continue working with both sides to pursue a settlement.”

On Monday, the President took the first step to invoke Taft-Hartley by ordering a study of the situation, which he received Tuesday. The four-page report to Bush concluded labor and management’s differences appear “seemingly intractable.”

“We have no confidence the parties will resolve the West Coast ports dispute within a reasonable time,” the report stated, while detailing a host of differences, the biggest of which is how workers will be affected when much-needed technology is installed.

Meanwhile, a House panel Tuesday heard testimony about the West Coast dock situation. Like the contract dispute itself, there was no consensus about how another shutdown could be avoided. It was also pointed out by lawmakers and witnesses that another shutdown could still occur, if both sides are still battling after the 80-day cooling-off period. Taft-Hartley doesn’t require that the parties reach a contract agreement.

“What makes this struggle so problematic for those of us who are port customers is that it is being waged coast-wide by two entities that have monopoly control over the supply chain from Asia,” said Kathryn Lavriha, senior vice president of government affairs with the International Mass Retail Association, testifying before the House Subcommittee on Employer-Employee Relations.

“It strikes me that a labor contract that covers every port on our West Coast poses significant future risks to our economy,” said Lavriha, noting that the East Coast differs because ports there are covered by several labor contracts. “The government regularly disciplines this kind of monopoly power and we would urge Congress to consider whether there are some actions that are needed in this case.”

Officials from the PMA were not at the hearing, but an ILWU representative testified. Max Vekich, president of ILWU Local 24 in Washington state, accused shippers of waiting for Taft-Hartley to be invoked as a bargaining strategy.

President Carter was the last to invoke Taft Hartley. In 1978, a court refused President Carter’s request for an 80-day cooling-off period in a coal miner’s strike, but ordered miners back to work under a temporary restraining order. President Nixon was the last president to successfully invoke Taft-Hartley to end a dock strike.

Vekich said when back on the job, dock workers will work hard, disputing widely held views in the shipping and importing industries that labor might readily deploy work slowdowns in protest. The PMA said ILWU work slowdowns led to shippers locking labor out of the ports.

“We did not slow down,” Vekich said.

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