It's Time for Politicians to Take a Stand

If workers strike at a hotel or a construction site, who is affected? A few customers are inconvenienced or construction gets delayed by a few days or weeks — big deal; a strike may make local headlines, but the impact is minimal. A port strike is an entirely different matter. Ports are referred to as “economic engines” not as a clever marketing slogan or because of the longshore, local trucking or other direct port jobs. Rather, it’s because, in moving through a port, cargo creates work all along the supply chain — trucks, railroads, import distribution centers, regional distribution centers, and, ultimately, retail stores.

That is why the now-eight-day strike at the ports of Los Angeles and Long Beach is seriously troubling. The ability of a few hundred clerical workers to deliver a potentially multibillion-dollar blow to the U.S. economy suggests something in U.S. public policy is seriously amiss. Ever roll your eyes at port economic impact statistics? They may not make for scintillating reading and often sound exaggerated, but here’s the reality: They’re essentially true. The Port of Los Angeles, as one example, claims an economic impact of 1.1 million jobs in California and 3.3 million nationwide and more than $26 billion in state and federal tax revenue. A sucker punch to this magnitude of impact is the last thing a finally recovering U.S. economy needs right now.

And that's also why the absence of pressure being brought to bear on the negotiating parties seems so odd, today’s arrival of a federal mediator notwithstanding. The fact is that politicians, from the White House on down have been as idle as the ships now anchored off the ports.

While the risks to the national economy will be mitigated to a certain degree by the fact that ships are able to find other ports to unload their cargo, the damage to the ports of Los Angeles and Long Beach could be lasting. You would think that with both Mexican and Canadian ports presenting viable routing options — as shippers have been reminded of in recent days — and the Panama Canal set to expand in just a few years, California leaders would be falling all over themselves trying to force a quick settlement and would have stood vigil against the very possibility of a work stoppage in the first place.

Take a look at the latest statistics from Prince Rupert, British Columbia. That upstart port 480 miles north of Vancouver that is emerging as a gateway for U.S.-bound retail goods has seen its container volumes soar — 44 percent year to date through October, handling nearly 475,000 TEUs — numbers that can’t be dismissed as insignificant. Does no one remember the 10-day work stoppage a decade ago that helped put the East Coast on the map for trans-Pacific import cargo?

As the Long Beach Press Telegram wrote in an editorial on Monday: “Ultimately, it's up to the shippers and union to end this strike, but there are ample opportunities for elected officials to show leadership in the face of what could be a huge economic crisis.” That’s not hyperbole. If this is a preview to the level of government response we’re going to see in the event of an East and Gulf Coast work stoppage at the end of this month — a very real possibility — we’re in trouble.

 Peter Tirschwell is senior vice president of strategy at UBM Global Trade. Contact him at ptirschwell@joc.com and follow him at twitter.com/PeterTirschwell.

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