As the Christmas season approaches, millions of Americans have already started their Christmas shopping. Millions more will wait until the last two weeks before they head out to shop. These shoppers may be surprised this year to find many shelves empty and if they do, they can thank the International Longshore and Warehouse Union.
On July 1, 2014, the union contract covering the 20,000 dock workers at 29 west coast docks expired. Dock workers have been working without a contract since that time. They continued to work because it appeared that the union and the companies that own and operate the west coast docks were making good progress towards hammering out a new contract, but those contract talks have broken down.
So how does this affect Christmas? Pacific Maritime Association is the organization that represents a number of the employers that operate the port terminals and shipping lines along the west coast. They have accused the ILWU of intentionally slowing down operations at four key ports, including the nation’s busiest port complex at Los Angeles and Long Beach.
The slowdown is causing a huge backup in the loading and unloading of cargo arriving and leaving the docks. That backup means that many stores are not going to get their Christmas orders of merchandise on time. I used to work in retail management and one of my jobs was to help establish the Christmas ads and place orders for the merchandise for those ad items by the end of January. Many companies are still doing this, which means their holiday ads and sales promotions have already been set and now they may not have the merchandise on the shelves for those ads.
The union is accusing the dock companies of using ‘deceitful media tactics’ designed to place all of the blame on the unions. When asked about the accusation that they are intentionally slowing down operations, union spokesman Craig Merrilees responded:
“Workers are frustrated because employers have delayed action for years on the underlying issues that created the port congestion … including many of their own making, and have also been delaying resolution of the contract talks for many months.”
A number of experts watching the situation report that both sides of the contract issue have grown exasperated with each other and that there is a growing likelihood that a strike could be called before Thanksgiving Day. Jack O’Connell, an international trade economist stated:
“The risk of disruption at West Coast ports by Thanksgiving is increasing day by day.”
In 2002, a similar contract dispute took place and again the union was accused of staging an intentional slowdown. The employers ended up locking the union workers out for 10 days which effectively shut down some of the vital west coast ports.
If a lockout or strike happens this year, you can be assured that it will result in many empty shelves before Christmas. This will not only impact shoppers, but retailers will also take a big hit in their Christmas sales which many rely on to get them through much of the next year. If their sales drop too much, it could cost jobs and even some companies to close their doors.
It’s not only seasonal merchandise that will be affected, but also the grocery industry. Many perishable food products are shipped in via the west coast ports and if there is a lockdown or strike, those perishable items will just sit on ships and rot. This will result in shortages is some food items and higher prices in the grocery stores as well.
Trucking companies that haul products from the west coast will also be impacted. Many truck drivers are independent contractors that haul for major companies and if there is nothing to haul, they don’t get paid and that could mean no Christmas for their families as well.
The National Retail Federation said in a letter:
“The sudden change in tone is alarming and suggests that a full shutdown of every West Coast port may be imminent. The impact this would have on jobs, down-stream consumers, and the business operations of exporters, importers, retailers, transportation providers, manufacturers and other stakeholders would be catastrophic.”
The bottom line is that there could be no worse of a time for a slowdown, lockout or strike of the west coast docks than right now. The employers are trying to remain solvent and compete with other ports of entry that are courting the shipping business in the Pacific, but the unions have not been willing to concede to the needs of the employers. If there is a lockout or strike, I blame the unions far more than I blame the employers. This is another of many reasons why I so dislike unions.