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Port backlog still ails economy
Same number of ships wait to unload cargo as before court-ordered reopening of ports.
October 21, 2002: 3:49 PM EDT
By Chris Isidore, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Two weeks after President Bush moved to reopen West Coast ports, the backlog of freight and effect on the economy is showing little signs of improvement.

About 200 ships are waiting to call on West Coast ports, almost the same number as when the president went to court Oct. 7 due to the damage to the economy. Retailers, manufacturers, agricultural companies and others who depend upon the ports are still being affected by the slow pace of recovery.

"It doesn't appear we're working through the backlog. The ships keep coming," said Don Wylie, managing director of maritime services for the Port of Long Beach, one of the nation's largest ports.

Some factories have suffered the shutdowns since the court-ordered reopening of the ports Oct. 9 due to the lack of spare parts. While many retailers have already shipped much of their inventories needed for the holiday shopping season through the ports, many are worried about how long it will take to get goods still on ships not yet at portside. Agricultural shippers have seen much of their perishable goods rot undelivered even since the ports reopened.

Management officials said at that time that they expected the backlog of freight that built during the labor dispute that started in late September would take six-to-eight weeks to clear up.

Some observers now say that it may not be until after Christmas for the problems to work themselves out. But on Dec. 27 the current 80-day court imposed cooling off period will end, and the labor and management would be free to strike or lock out the other side at that time.

"This hit when the system was already strained to its limit," said John Martin, a maritime economist and consultant. "You can't all of a sudden create more truck (equipment), more railroad cars and more trained labor to handle the backlog. Honestly, it may be early next year, if there is no strike or further lockout; that's when you can start catching up. That's normally the soft shipping season."

There are still no talks scheduled between the two sides in the labor dispute -- the Pacific Maritime Association, the management group that represents major shipping lines and port terminal operators, and the International Longshore and Warehouse Union, whose 10,500 members were locked out by PMA for a bit more than 11 days.

PMA says that it was forced to lock out the union because it had engaged in work slowdowns that amounted to strikes with pay, and that the union has yet to return to normal levels of productivity at the ports.

ILWU blames the backlog on the PMA lockout.

"PMA is saying that we are causing slowdowns because productivity is down by 20 to 25 percent," said a statement late last week by ILWU International President Jim Spinosa. "I think we must be doing pretty good if that's all we're down given the disaster the employers' lockout created."

Martin said his figures show productivity is down 10 percent at the key ports of Los Angeles and Long Beach, and down an average of 16 percent along the West Coast. He would not speculate on the cause of the drop in productivity, but he said the cost is still enormous, and could reach the billions if the backlog continues for several more weeks.

"If productivity remains 15 percent down over the course of 30 days, that's the equivalent of losing almost five days of work," he said.

Martin said that Mattel, the nation's biggest toy company, has nearly $100 million of goods on the water waiting to be unloaded, and that it is not certain if that will make it to stores by Christmas with the current delays. Mattel officials could not immediately confirm that number, but the company's earnings report last week said it is being affected by the dispute.

Honda Motor Co. shut its four North American Assembly plants Friday and again Monday due to lack of necessary parts. That follows different length shutdowns soon after the ports reopened.

"The supply situation was very spotty," said Honda spokesman Ed Miller. "We got them (parts) off the ships, but to get them out of the dock area was not an easy undertaking." He said that Honda hopes that it will be able to avoid further shutdowns, but is not certain it can.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.