Port strike could hit retailers during the holidays

December 3, 2012: 2:51 PM ET
long beach port picket line
A strike by clerks at the ports of Los Angeles and Long Beach could hurt retailers if the work stoppage goes on for much longer.
NEW YORK (CNNMoney)

A strike by clerks at the ports of Los Angeles and Long Beach in California has shut down the key entry point for trade to and from Asia, and could lead to some shortages of hot items for retailers this holiday season.

The strike reached in its seventh day Monday. The are 800 clerks represented by the International Longshore and Warehouse Union who are on strike against the Los Angeles/Long Beach Harbor Employers Association, which represents management for the shipping lines and cargo terminals.

Estimates from management and retailers are that the strike is costing the nation's economy up to $1 billion a day. Tens of thousands of truckers, railroad, warehouse and other support workers are also temporarily out of work because the strike has stopped the flow of goods they normally handle.

Over the weekend, customers of the shipping lines, including major retailers, asked the White House to intervene and seek a court order forcing the clerks back to work during an mediated cooling off period. But when asked about that request at a daily briefing Monday, White House spokesman Jay Carney refused to say whether the Obama administration would consider intervening.

"We're going to monitor the situation, and encourage all parties to continue the negotiations," he said.

While the clerks don't actually handle the cargo, the 10,000 dock workers who do move the containers on and off ships are refusing to cross the clerks' picket lines, effectively shutting down container operations at the nation's busiest ports.

Related: Why Wal-Mart workers are striking on Black Friday

The International Longshore and Warehouse Union charges that employers are trying to outsource good paying union jobs. Its members have been working without a contract since July 2010.

"We're drawing the line against corporate greed and outsourcing that's destroying the good-paying jobs that support working families in our community," said Trinie Thompson, a logistics clerk who is quoted in the union's press release. "The jobs here come with excellent wages and benefits -- but they'll eventually disappear if companies keep outsourcing them to India and Taiwan."

The group that is representing management disputes the claim that it is trying to send work elsewhere, saying in a statement that it is offering the union guarantees against layoffs. But it said the union's demand would make its operations less efficient. It would require them to hire unionized employees even though there is no business need for those workers, and place restrictions on customers entering data and tracking shipments electronically.

Related: Fast food workers protest in NYC

Management said the average member of the union is paid $40 an hour and that their pay and benefit package is worth $165,000 a year. Management says its latest offer would up that to $190,000 annually. A union spokesperson was not available to comment on that claim.

Jonathan Gold, vice president of supply chain and customs policy for the National Federation of Retailers, said his trade group's members will be badly hurt by the strike the longer it continues.

"Even though a majority of holiday goods are already here, this is retailers' last chance for a big push for holiday merchandise," said Gold.

Macy's CEO: Last minute shoppers are key

Gold said that if any of the ships are diverted to other U.S. West Coast ports, the fear is that the union will then strike those ports, spreading the impact of the shutdown. Air freight is too expensive for many of the items that arrive by sea, and not practical for items already on the ships.

The last work stoppage to hit the West Coast ports, in 2002, was ended when then President Bush went to court to order the two sides into a mediated cooling off period. But the Obama administration is much friendlier to labor than was the Bush administration. The union is opposed to presidential intervention in this case, and management itself has yet to request presidential intervention.

-- CNNMoney's Jennifer Liberto contributed to this report

Join the Conversation
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.20%4.30%
15 yr fixed3.28%3.30%
5/1 ARM3.53%3.34%
30 yr refi4.18%4.27%
15 yr refi3.26%3.27%
View rates in your area
 
Find personalized rates:
Rate data provided
by Bankrate.com
Search for Jobs