NEW YORK — Apparel importers took heart in the news late Friday that West Coast longshoremen and port operators had reached a tentative agreement in their bitter contract talks.
But with the mediator handling the negotiations emphasizing that there is still a long way to go and shippers continuing to work through the backlog of merchandise that built up during last month’s dock shutdown, shippers said they aren’t expecting smooth sailing through to Christmas.
A spokesman for Federal Mediation and Conciliation Service director Peter Hurtgen said the agreement between the International Longshore and Warehouse Union and Pacific Maritime Association focused on phasing in new technology while maintaining union jurisdiction over clerks working in the ports.
“Although a final agreement has not been reached, [Hurtgen], who has been mediating the negotiations, said a tentative agreement on the key issue of technology has been reached, allowing continued union jurisdiction for marine-clerk work,” the spokesman said. He emphasized that the agreement was “tentative” and offered no further details.
An ILWU spokesman confirmed: “We have a tentative agreement on the technology issue,” but also said he could offer no details.
PMA officials did not return phone calls late Friday.
A breakdown in contract negotiations between the two parties led to a 10-day lockout of West Coast dockworkers early last month, which ended only after President Bush ordered the ILWU’s 10,500 members to return to work and called for an 80-day cooling-off period. The shutdown of West Coast ports — the key entry point for most Asian imports — brought cargo to a standstill in early October. Importers have said the supply chain continued to run slowly through October, as a result of backlogs in trucks and containers. One shipping source said late Friday that, even with the tentative agreement, it is likely there will be “several weeks” before shipping returns to normal.
“It’s not going to be a fun Christmas,” the source said.
A major sticking point in the talks has been shippers’ desires to phase in new technologies, such as bar-code readers, which would replace handwritten logs and, in theory, allow cargo to move through the ports more quickly. The union is concerned the new technology would result in the elimination of some clerk jobs and — more importantly — that the people hired to use the new technology would not be union labor.
Hurtgen’s description of the agreement suggested that new staffers could be union members.
Apparel importers said the agreement seemed like it might be good news, but worried about the existing backlog of goods.
“It is encouraging,” said Erik Autor, vice president and international trade counsel at the National Retail Federation. “But we still need to wait until a contract is signed.”
Autor said retailers are not optimistic about receiving all of their stranded merchandise before the Thanksgiving weekend.
“Even if they signed a contract next week, it would be a tall order to clear the backlog by Thanksgiving,” Autor said. “At this rate, three weeks away from Thanksgiving, I’m not terribly optimistic.”
Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles and Apparel, said importers were relieved.
“They were concerned if it wasn’t resolved there would be serious financial losses,” said Hughes. “Many companies were really nervous because there would have been no easy way to stop a walkout or another lockout once the 80-day cooling-off period expired.”
Hughes also noted her members appear to be receiving shipments that were stranded without many difficulties.
“There is a big concern because the big shopping days are just three weeks away,” said Stephen Lamar, senior vice president at the American Apparel & Footwear Association. “It [varies] store to store, company to company and product to product and where everything was in the pipeline.”
He continued, “If they get this thing resolved once and for all and move forward to clear the backlog, I think things will be OK in the long run.”