California has much to lose in port standoff

Shipping containers are stacked up waiting for truck transport at the Port of Los Angeles.
Shipping containers are stacked up waiting for truck transport at the Port of Los Angeles. Associated Press

We may do more and more of our commerce in the digital world, but a lot of those electronics, clothes and other products we order still arrive by ship, which then take U.S. exports around the world.

That should make it clear that the long-running labor dispute at West Coast ports is a danger to the U.S. economy. It’s about time that the Obama administration decided to get directly involved.

On Saturday, the White House announced that President Barack Obama had ordered his labor secretary to California to try to negotiate an agreement between shipping companies and the dockworkers union. Secretary Tom Perez is scheduled to meet both sides Tuesday in San Francisco.

The stakes are particularly high for California.

The ports in Los Angeles and Long Beach handle about 40 percent of all incoming container cargo – when they’re up and running. Now, however, more than 30 ships are waiting offshore, unable to unload thousands of containers.

At the Port of Oakland, outbound shipments have slowed to a crawl. Businesses in Sacramento and across Northern California are being affected. So are growers of the state’s top cash crop – almonds. About 70 percent of California-grown almonds are exported, and nearly 80 percent of those exports go through Oakland.

If major shippers get fed up and go elsewhere, the impact on the ports – and on the dockworkers – could be devastating. They only need look at what’s already happened in Portland, where South Korea’s largest shipping company, Hanjin, which accounted for nearly 80 percent of business at that port, announced last week it’s pulling out.

U.S. retailers and business groups say the port delays have cost hundreds of millions of dollars. It’s no wonder that members of Congress and state legislators have called on Obama to push a quick settlement.

About 20,000 members of the International Longshore and Warehouse Union have been working without a contract since July at 29 West Coast ports. Prospects were looking up when the union and the Pacific Maritime Association, which represents mostly foreign ship owners, agreed to bring in a federal mediator last month.

But the standoff has become nasty, raising fears of a lockout. The association has accused the union of slowdown tactics and, refusing to pay overtime, has halted unloading of ships, including over Presidents Day weekend.

As Jock O’Connell, a Sacramento-based trade economist, pointed out in California Forum on Sunday, the challenges facing West Coast ports go beyond the current gridlock. When the massive Panama Canal widening project is completed next year, increasingly large cargo ships from Asia will be able to go directly to Gulf and East Coast ports. It doesn’t help the standing of the West Coast ports to have this slowdown.

There’s no time to waste for the White House to help resolve this impasse before the damage gets any worse.