BOSTON -- Weeks after a critical West Coast port complex was
crippled by a few hundred striking workers, the East Coast is bracing
for a possible walkout numbering thousands that could close 15 ports
from Massachusetts to Texas.
The latest talks between shipping
companies and dockworkers broke down Tuesday, less than two weeks before
the contract expires Dec. 29, leading to worries a strike was
The National Retail Federation wrote to President
Obama this week to ask him to use "all means necessary" to head off a
strike, which they fear could have catastrophic ripple effects
nationwide. "We foresee this as a national economic emergency, to be
honest," said Jonathan Gold, the group's vice president of supply chain
and customs policy.
Gold said billions in commerce at countless
businesses nationwide could be affected, from auto manufacturers
awaiting parts to the truckers that deliver them.
Lazcano, founder of the Los Angeles-based Andean Dream LCC, said a
strike on the East and Gulf Coasts could bankrupt her company, which
sells soups, pasta and other products made from quinoa, a grain, grown
in the Bolivian Andes.
The company has two containers shipped
monthly to both Los Angeles and Philadelphia, and Lazcano said she's
still recovering from the eight-day strike of 450 clerical workers at
the Los Angeles-Long Beach port complex, which ended Dec. 4.
"If the strike does happen, we will be paralyzed," she said. "We will not be able to fill orders."
McNamara, spokesman for the International Longshoremen's Association,
said the union knows what's at stake for others but must protect its
"We offer the labor that keeps the commerce moving,"
he said. "If management doesn't appreciate or respect the labor that has
made them a lot of money, then we have to do what we have to do."
strike wouldn't affect passenger cruise ships, U.S. mail, military
cargo or perishable cargo with a limited shelf life. It also wouldn't
affect non-container, or break bulk, cargo such as steel, wood products
The longshoremen's union represents 14,500 workers at
the 15 ports, which extend south from Boston and handle 95 percent of
all containerized shipments from Maine to Texas, about 110 million tons'
worth. The New York-New Jersey ports handle the most cargo on the East
Coast, valued at $208 billion in 2011. The other ports that would be
affected by a strike are Boston; Delaware River; Baltimore; Hampton
Roads, Va.; Wilmington, N.C.; Charleston, S.C., Savannah, Ga.;
Jacksonville, Fla.; Port Everglades, Fla., Miami; Tampa, Fla.; Mobile,
Ala.; New Orleans; and Houston.
The impasse comes during a 90-day
extension of the current contract. On Tuesday, a federal mediator
offered another monthlong extension. Various issues, including wages,
are unresolved, but the sides couldn't agree on what's become the key
sticking point, container royalties.
The royalties are payments to
union workers based on the weight of cargo received at each port. They
were created in the 1960s to boost wages and finance worker benefits
after increased automation cut down salaries and jobs, making it
impossible for the dwindling labor force to finance its benefits,
The container carriers and port operators,
represented by the U.S. Marine Alliance, want to cap the royalties at
2011 levels, saying they've morphed into a huge expense, totally
unrelated to their original purpose, which hurts the industry's
competitiveness as it tries to keep up with new technology. The alliance
says the royalty payments now amount to a bonus averaging $15,500
annually for East Coast workers who already earn more than $50 per hour.
union says the payments aren't a bonus, they're an important
supplemental wage. It argues that in its previous contract, management
agreed to remove the royalties cap in exchange for being allowed to use
$42 million of royalty payments to cover a previously negotiated wage
increase. There's no way the union can allow the alliance to revive the
cap now and accept the cuts in worker income and union revenue, McNamara
The sides have traded charges of inflexibility, though both
also point to a history of cooperation since the last East Coast-wide
strike in 1977. No one has ruled out renewing talks.
But with time
so short, companies are pushing up shipment dates or finding
alternative transportation, said Steve Lamar, executive vice president
of the Washington-based American Apparel and Footwear Association.
are already worried about restocking after the holidays, and some are
still dealing with the effects of the West Coast shutdown and Superstorm
Sandy, he said.
"You've already got companies and ports and trade
that have been battered by a couple of situations over the last couple
of months, and we still have this uncertainty," Lamar said.
In Philadelphia, port executive Robert Blackburn estimates a strike could affect 60 percent of the tonnage the port handles.
there's not a lot we can do except that hope that cooler heads prevail
and, if they don't, perhaps there will be intervention by the
president," Blackburn said.