US West Coast ports were closed for a fifth day Tuesday in a contract dispute between shipping companies and dockworkers that may drain billions of dollars from a faltering economy.
Nissan Motor Co said it may delay the introduction of the Infiniti M45 sedan, planned for tomorrow, and Yellow Corp, the largest trucker, said it would try to ship through East Coast, Southern or Canadian ports. Retailers including Gap Inc and Wal-Mart Stores Inc said they're working on ways to cope with a shutdown.
"We're gnawing on our fingernails," said Jack Kyser, chief economist at Los Angeles Economic Development Corp. He estimated the cost of the disruption to Southern California at US$300 million a day in lost wages, reduced production and spoilage of fresh fruits and vegetables. And any strike "would have major national implications," he said.
Six of the top 12 US trading partners are in Asia, with shipments worth more than US$330 billion last year, according to the Commerce Department. Of that total, more than 80 percent arrived through West Coast ports. A shutdown for 10 days may cost the economy as much as US$19.4 billion, the consulting firm Martin Associates said in a study conducted for shipping companies.
International Longshore and Warehouse Union officials walked out of a meeting today with Peter Hurtgen, head of Federal Mediation and Conciliation Services, said Steve Stallone, spokesman for the union, which represents about 10,500 port workers.
Stallone said today's talks broke down because carriers' representatives brought armed security people. Pacific Maritime Association spokesman Steve Sugerman said the security was hired days ago and wasn't in the room.
Companies in the Pacific Maritime Association had closed ports and asked for a mediator after workers adopted safety rules that slowed operations. The union hasn't decided whether it will attend a meeting set for tomorrow with a federal mediator, James Spinosa, the union's president, said at a press conference in San Francisco.
The economy doesn't need the burden of a port strike. US manufacturing contracted in September for the first time in eight months, according to a survey released today by the Institute for Supply Management.
"When we are three, four or five days into a disruption that creates a void," and manufacturers must "decide whether to keep assembly lines open," said National Industrial Transportation League Vice President Peter Gatti, whose group lobbies in Washington on freight-shipping issues for General Motors Corp and about 800 other US companies.
The National Retail Federation, representing 1.4 million companies, asked US President George W. Bush to open the ports. The group's chief executive officer, Tracy Mullin, said in a letter to the president that the closure may cost the US economy US$1 billion per day.
Three years ago, when ports on the West Coast were disrupted during contract talks, retailers and other US importers and exporters pressured the carriers association "to accept the deal that was on the table," said Erik Autor, international trade counsel with the retail federation. It was too soon to tell whether that might happen again, he said.
Bush said the administration is "closely monitoring" the dispute. "This has come at a bad time," he said. "There's a federal mediator on the ground and we urge both sides to work together." The carriers won't reopen cargo terminals without a new contract, or until the dockworkers' union signs an extension, the maritime association said. The union opposes an extension.
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