WASHINGTON — The East Coast ports may be a safer haven for labor-management relations, but they’re not the panacea for avoiding another West Coast cargo gridlock.
This story first appeared in the October 22, 2002 issue of WWD. Subscribe Today.
Importers feel the odds are against an East Coast port shutdown similar to the one that brought trade to a grinding halt for 10 days earlier this month on the West Coast.
Differences in contracts and labor management relations are the key factors why ports from Miami to Maine aren’t likely to face the same predicament any time soon. East Coast ports handle apparel and textile containers from Europe, sub-Saharan Africa and South Asia, while West Coast ports handle the bulk of cargo containers from the Far East.
But there is concern from importers that longshoremen on the East Coast will stage a solidarity strike with West Coast counterparts and refuse to unload any diverted shipments from the 29 major West Coast ports, which are currently trying to clear a huge backlog, should settlement not be reached in the dispute between dockworkers and shippers.
A federal judge ordered the continuation of an 80-day “cooling off” period last Wednesday between the dockworkers’ union and the Pacific Maritime Association after President Bush intervened and invoked the Taft-Hartley Act, which gives him the power to seek a court order demanding the parties return to work.
Talks between the two sides broke down over such issues as how to introduce computerized tracking and technology to the ports without losing jobs. Technology has been a key sticking point in union-management negotiations since the Sixties and it will also be an issue on the East Coast.
“We have been dealing with technology issues since the late Sixties and it is a common issue in negotiations because you want to protect as many jobs as you can,” said a spokesman for the International Longshoremen’s Association on the East Coast.
But he said there are currently “no foreseeable problems” in preliminary contract negotiations. The ILA is not affiliated with the International Longshore & Warehouse Union on the West Coast and the master contracts expire at different times.
The ILA’s contract, which expires Sept. 30, 2004, covers 45,000 workers, stretching from ports in Eastern Canada and Maine to Florida and Brownsville, Texas.
A strike or management-ordered shutdown on the East Coast would have as big an impact on the U.S. economy as the shutdown on the West Coast, which cost an estimated $2 billion a day. There are 16 full-service ports on the East Coast, according to the U.S. Customs Service.
Of the $79.8 billion in apparel and textiles imported into the U.S. in the year ending Sept. 30, $13.2 billion entered through New York City and Newark, N.J. ports, while $12.6 billion entered through the Long Beach-Los Angeles ports in California, according to Marjorie DeLoach, director of Customs’ Strategic Trade Center in New York.
The top five East Coast ports handling apparel and textile imports in fiscal 2001 were: New York-Newark, Miami with $7.5 billion in imports; JFK International Airport with $5.6 billion; Charleston, S.C. at $2.3 billion, and Atlanta, at $1.3 billion, according to DeLoach.
Importers are more concerned about an immediate solidarity strike on the East Coast as opposed to a breakdown in negotiations when they begin in 2004.
“I don’t see the same type of situation on the East Coast as I do on the West Coast because the East Coast has local contracts on a port-by-port basis,” said Jonathan Gold, director of international trade at the International Mass Retail Association. “The ILA is also more embracing of technology and it’s not as big an issue, so the relations are better between the two sides.”
An ILA spokesman said there is one master contract that covers wages, hours and the terms of the agreements, contributions and fringe benefits. Local contracts cover work rules, flex time, vacation and holidays.
“Some ports like New York have a guaranteed annual income through retirement and that is virtually nonexistent anywhere else,” the spokesman said.
Hubert Wiesenmaier, executive director of the American Import Shippers Association, whose members are apparel importers, said ocean carriers are not diverting to the East Coast because of the threat of a solidarity strike.
“Carriers are hoping for a quick resolution [on the West Coast] and got in line,” he said. “Carriers don’t want to take a risk of diverting to the East Coast and finding the longshoremen won’t handle it.”
Robin Lanier, executive director of the West Coast Waterfont Coalition, said she doesn’t expect strikes on the East Coast.
“The union showed up to work on the West Coast,” she said. “This was not a strike. It was an employer lockout.”
She also noted that most carriers won’t divert to the East Coast because the ships are too big to pass through the Panama Canal.