West Coast Dockworkers, Shippers ‘Far Apart’ on Contract

Cargo containers are ready for transportation at the Port of Los Angeles October 27, 2014. REUTERS/Bob Riha Jr.

By James Nash

(Bloomberg) — West Coast dockworkers and their employers remain far apart in contract negotiations that have stretched over seven months and no settlement is imminent, a spokesman for shippers, stevedores and terminal operators said.

The Pacific Maritime Association that represents port employers made the assessment in a statement a day after 90 leaders of the International Longshore and Warehouse Union returned home after convening in San Francisco.

“Statements and rumors that our negotiations are ‘close’ to a final contract are not true,” Wade Gates, a spokesman for the association, said in the statement. “Even after seven months of negotiations, we remain far apart on several issues, and the union slowdowns continue to disrupt the movement of cargo through the ports.”

The union represents 20,000 longshoremen at 29 West Coast ports from San Diego to Bellingham, Washington, that handle about half of all U.S. imports. The maritime association says workers have slowed container handling at several ports including Los Angeles and Long Beach, California, the biggest in the U.S. by volume.

The slowdowns have exacerbated congestion from equipment shortages and rail delays that increased the number of ships waiting to load and unload.

Craig Merrilees, a spokesman for union, said that, while no agreement is impending, negotiations “remain positive and are making progress.” Union and shipping negotiators are meeting separately today and will meet together tomorrow, Merrilees said.

Rationing Fries

Delays at the West Coast ports have caused McDonald’s Corp. restaurants in Japan to offer only small fries to customers because fewer U.S. potatoes are crossing the Pacific, the company said on its website. Macy’s Inc. said in November that port congestion was keeping products off its shelves.

In a conference call today, FedEx Corp. Chief Executive Officer Fred Smith said tie-ups at West Coast ports have depleted some retail inventories, causing some holiday shoppers to buy gift cards instead of merchandise.

“The slowdown in the West Coast ports has been a much bigger deal than people think and a tremendous amount of inventory was simply not put through the ports in the timeframe that the retailers had expected,” Smith said.

Merrilees dismissed Smith’s comments as “phony hysteria” and said much of the congestion at the ports is the product of shipping company practices, not worker slowdowns.

“They aren’t in the maritime shipping business,” Merrilees said of FedEx.

About 90 delegates convened in San Francisco this week and unanimously passed a resolution affirming the union’s stance in negotiations, Merrilees said.

The two sides have been talking since May. Dockworkers haven’t had a contract since a six-year agreement expired July 1. Some began slowdowns and other disruptions in late October, according to the maritime association.

Copyright 2014 Bloomberg.