LOS ANGELES — The dockworkers union and major shipping lines have reached a tentative agreement to hire as many as 2,000 nonunion workers to cope with rising traffic at the nation’s busiest port complex, union spokesman John Showalter said.
The preliminary accord between the Pacific Maritime Association, which represents the lines, and the International Longshore and Warehouse Union Locals 13 and 63 is intended to ease the labor shortage at the ports of Los Angeles and Long Beach. Showalter wouldn’t disclose details, though he said a formal announcement may come as soon as today.
The agreement comes as the ports, which handle 43 percent of the nation’s cargo, deal with a confluence of factors leading to the traffic buildup. The boom in trade from China and the arrival of bigger vessels — some ferrying as many as 7,000 containers each — are creating delays that already have been compounded by security measures intended to prevent cargo ships from being used by terrorists as weapons-delivery systems.
The scramble for long-term solutions to the logjam includes a proposal to run a 24-hour operation, but implementing it across the supply chain with retailer buy-in is tricky, retail analysts said.
“No one wants to incur higher costs, adding shifts and paying extra wages, but they have to weigh that against not getting product,” said Liz Pierce, senior vice president at investment banking firm Sanders Morris Harris.
Some retailers said they’ve seen delays of at least two days improve, but they express concern about the future. “We’re always worried,” said Larry Meyer, chief financial officer for Forever 21, a Los Angeles-based teen retailer with annual sales of $500 million. “We’re working with our forwarders to make sure we protect our deliveries.”
Local manufacturers said they still aren’t taking chances and will plan ahead to avoid delays. Junior T-shirt company Self Esteem, which imports 50 percent of its product, began diverting traffic to Oakland and Miami in May.
Tyte, a $50 million junior denim resource, has placed about 40 percent of its orders on spec, said Alden Halpern, president of 4WHATITSWORTH Inc., parent company of Tyte.
Others say they have shifted gears by boosting local sourcing. “For fall and holiday, we’ll rely more on domestic production than we normally do,” said Lonnie Kane, president of women’s sportswear maker Karen Kane. “We don’t want to get caught with our pants down.”
Homeland Security secretary Tom Ridge visited the ports of Los Angeles and Long Beach last month to announce tougher measures that begin before a ship leaves a foreign port. Among the requirements: Ships must provide a manifest to U.S. authorities 24 hours before they set sail, 96-hour advance notice of arrival once in transit and inspection by U.S. Customs and Border Patrol of vessels that depart from 20 major ports.
Traffic has almost doubled at the port of Los Angeles to about 7.2 million 20-foot equivalent shipping containers last year from about 3.8 million in 1999. Volume is up 16 percent at Long Beach this year to 2.5 million shipping containers.
David Arian, president of the ILWU’s Local 13, has said 2,000 more workers would be insufficient to handle the workload. “We need 2,000 [skilled workers] and 10,000 [unskilled workers],” he said.
PMA officials declined to comment.
Still, the backlog at the ports raises questions of security. About 6 percent of the nation’s cargo containers receive physical inspections, said Michael Fleming, spokesman for Customs and Border Protection. That number has grown from about 2 percent since Sept. 11, 2001.