Labor issues are ongoing at the ports of Los Angeles and Long Beach, says LAT report

A report in the Los Angeles Times earlier today stated that negotiations between teams representing employers at the ports of Los Angeles (POLA) and Long Beach meet with the International Longshore and Warehouse Union Local 63 Office Clerical Unit (“OCU”) remain slow-going overall.

This follows news that at POLA operations at 10 of the 14 terminals have stopped and in Long Beach, three of six terminals are currently closed.

The LAT report said that talks to end the strike “intensified over the weekend but with no resolution,” and Los Angeles Mayor Antonio Villaraigosa wrote in a letter to John Fageaux Jr., president of the union’s clerical unit, and Stephen Barry, chief negotiator for the employers group that he is calling for around the clock bargaining with a mediator to bring this to a conclusion.

As previously reported, the OCU has been working without a contract since June 30, 2010. Since its workers have striked, the LAT report said that there have been periods of little or no negotiation, coupled with the strike costing the local economy billions of dollars, according to Villaraigosa.

The LAT said that the ILWU issued a statement indicating that it has offered concessions on new hires that was rejected, and ILWU spokesman Craig Merrilees said in the report that the union is prepared to keep negotiating.

Due to the strike, the report said there are currently about a dozen ships sitting offshore that are unable to unload or load cargo, with another ten ships scheduled to arrive today, citing the Marine Exchange of Southern California.  And since that report was issued, LM has learned that 11 container vessels are currently anchored at both the Port of Los Angeles and the Port of Long Beach, and 11 ships have been diverted since the strike commenced and have gone to Oakland, Panama, and Mexico.

Port of Los Angeles spokesman Philip Sanfield told LM that negotiations went until late last night and resumed today but was unable to offer up specifics.

According to the POLA web site, there are currently seven container terminals not in operation, including: China Shipping (Berth 100), Yang Ming (Berths 121-131), Yusen (Berths 212-225), Evergreen (Berths 226-236), APL (Berths 302-305) , APM (Berths 401-404) and California United (Berths 405-406), with one container terminal, TraPac, remaining open.

And at the Port of Long Beach three of its six container terminals at the Port of Long Beach were closed, including Long Beach Container Terminal at Pier F, International Transportation Service at Pier G and Total Terminals International at Pier T, with the following terminals in operation; SSAT at Pier A, SSAT/Matson at Pier C and Pacific Container Terminal at Pier J.

“It’s essential that both sides in this labor dispute return to the negotiating table and resolve this now,” said POLA Executive Director Geraldine Knatz in a statement issued last week. “We are starting to see ships divert to other ports, including to Mexico. This dispute has impacted not only our Port work force but all stakeholders who ship goods through our complex and potentially the hundreds of thousands of jobs that are directly and indirectly related to port operations. In today’s shipping environment, we can’t afford to lose cargo or our competitive advantage.”

National Retail Federation President and CEO Matthew Shay said today that the NRF is renewing its call for President Obama to intervene and end this work stoppage, explaining that the shutdown is already having a significant negative economic impact on retailers trying to bring in merchandise for their final push for holiday sales and will soon have an impact on consumers.

“The work stoppage not only impacts retailers, but is also affecting their product vendors – many of which are small businesses – and other industries like manufacturers and agricultural exporters that rely on the ports,” said Shay in a statement. “As the debate in Washington continues to focus on the state of the American economy and relief for middle-class consumers, a protracted strike will ultimately result in higher prices at the very time we can least afford it. This strike is now at the national emergency stage impacting industries far and wide. ‘Urging’ both sides toward a solution is not the answer. The Obama Administration needs to show leadership and resolve to get the ports operational again and prevent any further economic damage.”

Stifel Nicolaus analyst David Ross wrote in a research note that this situation is hindering supply chain productivity, noting that whether or not the clerical workers have a legitimate grievance in their contract negotiations, supply chains are being disrupted.

The growing number of idle ships at the ports translates to delivery delays and could lead to stock-outs when combined with currently lean retail inventories,” wrote Ross.