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NO SETTLEMENT SEEN IN L.A. DOCK TALKS

LOS ANGELES -- A resolution appeared to remain far off Thursday in the dispute between the International Longshore and Warehouse Union and the Pacific Maritime Association a day after a media blackout between the two sides disintegrated into a...

LOS ANGELES — A resolution appeared to remain far off Thursday in the dispute between the International Longshore and Warehouse Union and the Pacific Maritime Association a day after a media blackout between the two sides disintegrated into a tattling session.

This story first appeared in the June 28, 2002 issue of WWD.  Subscribe Today.

Meanwhile, in what an ILWU spokesman called “a show of strength,” the union brought in Teamsters president James Hoffa Jr. to speak at a rally at the Port of Oakland on Thursday.

The three-year labor contract between the ILWU and the Pacific Maritime Association officially expires Monday. But sources said the union will not walk out or stage a slowdown next week, which includes two paid union holidays: July 4 and the July 5 “Bloody Thursday” holiday, which commemorates union workers killed during strike struggles.

Both sides admit talks have focused so far on the union’s pension and health benefits, while crucial issues of automation have yet to be broached. Apparel executives fear if the talks drag out for weeks past the deadline, prevailing uncertainty will keep airfreight prices artificially high and complicate logistics.

The ILWU spokesman characterized the talks as “difficult,” while a PMA spokesman said the organization would consider lockouts as a response to slowdowns. “The one thing we’re not interested in is letting them have a strike with pay,” he said.

Several industry observers pointed out that companies that have not made some contingency plans by now have little maneuverability as feasible alternatives are rapidly diminishing.

The Port of Vancouver, the closest modern container port, has said it will not handle additional vessels during a strike or slowdown. Airfreight space is already scarce — freight agents said airports in mainland China, Hong Kong and Tokyo already have a week’s worth of goods sitting on the tarmac. Despite these gathering clouds, many apparel executives are jittery, but still betting against a strike or prolonged slowdown.

“I’m seeing more nervousness than action at this point,” said Bill Hogan, import manager for Chicago-based freight forwarder Phoenix International. “The logistics of rerouting a supply chain are very difficult. Especially small and mid-sized textile importers didn’t want to take the chance of rerouting cargo for something that may not happen.”

Hogan recounted how one retailer confessed she “would lose her job” if she opted for airfreight, and a strike didn’t happen.

Speaking from his office overlooking the port of Long Beach, the $9 billion hub of West Coast apparel importing, freight specialist Cliff Katab said he’s been advising his apparel clients to sit tight. “Both sides are walking a pretty fine political line,” said Katab, vice president of consolidator Gale Triangle, which works with more than 150 apparel importers. “We’re in a lot of port meetings and have our ears close to the ground. No one has said, `There’s definitely going to be a strike, route your goods out of here.”‘

Robert Krieger, president of consolidator Norman Krieger Inc., took a more conservative approach, advising clients weeks ago to bring in an emergency supply of fabric and components to run domestic factories and produce reorders. “People that have called this week and told me they don’t have enough to keep factories open, I’ve told them to use airfreight this week, even though it’s speculative and the costs are high,” he said. Although most freight forwarders agreed that even a short strike would catch many vendors flat footed, most are waiting it out.

“Our strategy, our assumption, is the odds are good they’ll be a slowdown, but not a strike,” said Ron Sharpe, vice president of distribution services for Seattle-based Unionbay. “I think 95 percent of importers have taken our approach. Plan deliveries around it, but assume President Bush would step in on a full strike.”