The unions strut their stuff, Long Beach and Los Angeles think they're too big to fail and everybody loses.
The invisible elephant in the room in West Coast merchant shipping continues to be the International Longshoreman and Warehouse dockworkers union. Every six years, at labor contract time, the elephant gets bigger while the terminal operators and carrier lines – the employers – get more timid.
For the contract to July 2013, the wage for the lowest, unskilled permanent worker rises 15 percent to almost $36 an hour – with pension, medical and vacation allowances on top of that.
So, when the union throws its weight around, everyone shrinks into their boots, hoping the elephant will quieten down or go away.
Which is what happened recently at Los Angeles/Long Beach, over the trivial matter of who has the right to give orders on the waterfront. Specifically, company superintendents have been instructing dockers about ships that need unloading and related matters.
Three ILWU locals got in a kerfuffle, organized union meetings and told dockers not to talk to or take orders from any company superintendents and, even, not to wear safety vests with company logos. The employers, represented by the Pacific Maritime Association, gave out bland reassurances that there was no problem or difficulty.
Some industry insiders see the incident as territory demarcation, in that the ILWU is concerned that increasing use of technology is erasing the line between workers and management.
Which is all very well, but impartial observers would immediately wonder why the incident blew up in the first place. And here, a more serious reason emerges.
Although it's difficult to imagine, dockers are feeling the recession. Not so much the permanent workers – they are guaranteed a minimum wage if there is less than a week's work – but the thousands of casuals, who are paid solely for the hours they work.
In the first half of the year, the number of hours worked by the full-timers was down 23 percent at Los Angeles/Long Beach, while the decline for the casuals was off a whopping 90 percent. For the whole western seaboard, the drop was 20 percent and 83 percent respectively.
Union rank and file are griping like mad and telling their leaders to do something, according to waterfront insiders. Trumpeting about encroachment on territory has been one of the actions.
In the long run of course, the reputation of the two ports sinks further, confirming shippers' pessimism about reliability and efficiency. Add to this difficulties such as the five-year wait for the TraPac terminal at LA, a subsidiary of Mitsui OSK, to get a lease extension because of complicated environmental requirements.
The word in the industry is that transport planners are considering the previously unthinkable notion that LA/Long Beach will never reach their previous growth patterns and even within the next 10 years lose their top rank as container conduits.
Maritime leaders are also aghast that LA is cozying up to another trade union, the Teamsters -- spending hundreds of thousands of dollars on lobbying in Washington to be allowed to forbid truckers from continuing as owner-drivers and to become company employees.
Long Beach has sensibly steered clear of this minefield – but will inevitably be tarred with the same brush.
As one insider puts it:"The ports have the mindset that they are too important to fail. Look at what happened to the finance and auto sectors which had the same attitude when the recession hit."