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Port Strike Impact

by Simon Avery Tuesday, Jul. 23, 2002 at 3:29 PM

Copied from the Press Telegram, article gives you an idea of the impact of a port strike. Truckers are trying to leverage the situation, and organize into unions.

LOS ANGELES Acres of brown, blue, red and yellow 40-foot containers fill the shipyards. They run as far as the eye can see, stacked three high, forming long steel corridors down the length of the docks.

Inside, their hidden contents include almost everything a consumer could imagine furniture, clothing, toys, tractors, computers, waste paper, pet food.

Some of the goods are on their way to low-cost manufacturers in Asia, like the 2,389 cubic feet of raw cotton heading to Jakarta in one container.

Others are inbound to shops in nearly every town across America, like the boxes of butane lighter fluid just arrived from China.

The profound scale of the operation leaves no doubt that a labor disruption during ongoing contract talks between carriers and longshoremen would reverberate in every corner of the U.S. economy.

"The effect could be chaotic,' said Monroe Milstein, founder and chief executive of the Burlington Coat Factory Warehouse.

The New Jersey-based chain of 294 department stores brings about 60 percent of its product in through West Coast ports.

The contract between carriers and West Coast longshoremen expired July 1. Since then, the Pacific Maritime Association and the International Longshore and Warehouse Union have been extending the contract on a 24-hour basis at each negotiating session. So far, however, the union has disavowed any intent to stage a slowdown, and it has not yet taken a strike vote among its members.

The PMA has argued that West Coast ports are becoming bottlenecks in the supply chain of goods from Asia because the union has spurned technological improvements in an effort to save about 2,100 clerk jobs. The ILWU says it's not against technology, but the new jobs must stay within the union.

Together, the goods crossing the docks at the combined Los Angeles and Long Beach ports the third largest complex in the world and at the other smaller West Coast ports from San Diego to Seattle, represent nearly 8 percent of the nation's GDP.

Some 4 million jobs around the country rely on the smooth flow of goods through those ports.

West Coast ports have helped sustain the national economy by funneling billions of dollars worth of furniture, automobiles and automobile parts into the country the key ingredients of the consumer spending binge that kept the recession mild said Larry Keller, executive director of the Port of Los Angeles.

The ports are also the gateway to Asia for businesses across the country.

The top imports by dollar value through the Port of Los Angeles last year were apparel, toys, computers and office machines, and furniture. The leading exports were resin, raw cotton, waste paper, scrap metal and pet and animal food.

A work stoppage on the West Coast wouldn't create much damage if it lasted less than two weeks, said Milstein. But anything beyond that would disrupt his company's supply of clothes, handbags, belts, perfumes, shoes, furniture and other merchandise coming from Asia, he said.

"Most everything today comes through West Coast ports,' he said. "Twenty years ago at least half of it was made in the United States.'

Each year, about 5,500 vessels move through the ports of Los Angeles and Long Beach, some more than 1,000 feet long. Each holds several thousand containers, or "cans,' which are unloaded by 105-foot high cranes that permanently hover above the ships' berths on the docks.

Some 34,000 trucks line up each day to deliver exports and haul away the incoming merchandise.

The Port of Los Angeles on its own sprawls over 3,800 acres of water and another 3,700 acres of land. Eighty shipping lines moved 3.9 billion worth of goods through the facility in 2001 35 percent of the nation's container traffic.

For business owners like Charlie Woo, founder and chief executive of Megatoys, the port is an irreplaceable life line to his suppliers in China, offering the fastest and cheapest travel time for his goods.

"The port has made my business competitive in L.A. Without it I wouldn't be able to survive in this industry,' said Woo.

Megatoys has found its niche selling toys to small retailers that giant toy companies like Mattel don't serve. In 13 years, Woo has built a million-a-year import business that employs 70 people.

The firm imports dolls, radio controlled cars and other battery toys from manufacturers in China's special Shenzhen economic zone.

The merchandise is loaded into 40-foot containers, which hold several thousand toys each. The containers travel by truck to the south China port of Yantian, and 12 days later they arrive in Los Angeles. Door-to-door delivery costs him ,500 per container, Woo said.

Last month Woo brought in an extra million of inventory to cushion his business during any labor disruption, he said.

"I have no other contingency plans because they would not be economical,' he said.

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Megatoys - megaprofits johnk Tuesday, Jul. 23, 2002 at 3:42 PM

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