West Coast stalemate continues

Brent Felgner, Staff Staff, September 9, 2002

As critical fourth-quarter holiday shipments were scheduled to hit store shelves, the threat of West Coast shipping disruptions still loomed late last week, even as dockworkers and management negotiators returned to the bargaining table.

By Friday morning there were some hopeful signs that progress was being made toward a settlement and new contract.

Three days after shutting down the talks over the Labor Day weekend, the International Longshore and Warehouse Union (ILWU) on Wednesday resumed the bargaining sessions here with the Pacific Maritime Association (PMA), which represents the shipping lines.

But the union refused to rule out the possibility of future job actions. Likewise, shippers held up the specter of a lockout in the face of any slowdowns.

Yet a full strike seemed to remain a remote possibility, since union rules mandate mail balloting to authorize such an action — a process that would take at least two weeks, according to the ILWU.

Following the resumption of talks, the hyperbole subsided somewhat after the two sides came to an agreement involving the health care benefits last Wednesday night.

"This is the first step in a long road to an agreement between the ILWU and the PMA," the union said in a prepared statement whose conciliatory tone represented a marked departure from the previous day's rhetoric.

In the meantime, retailers continued their scramble for potential alternatives — no easy task, since the West Coast ports handle the lion's share of trade with the Pacific Rim and diverting those shipments elsewhere would present a costly and time-consuming choice. The potential disruption also captured the attention of the home textiles industry, since so many of its products originate in Asia and the Indian subcontinent.

Many retailers are already well into their annual load-in periods of holiday goods, but the product pipeline commonly remains jammed with new shipments through Christmas.

"Any potential dock strike would present a serious situation for us to manage through," offered Sears spokeswoman Jan Drummond. "We had accelerated shipments as much as we could earlier in the year in order to get ahead of the curve. We actually had anticipated protracted negotiations."

As far as any shipments currently on the water, there are no concrete plans, she said, although in prior years Sears had considered using ports in Mexico or on the East Coast.

"But overall, we're in pretty good shape. Most of our late fall and holiday merchandise is already in," Drummond explained.

But for many U.S. retailers a renewed contract agreement represents the best hope of avoiding disruptions in the flow of goods.

"At this time we're not anticipating any [job actions]," said Charles Turner, executive vp/cfo for Pier 1 Imports, which imports its goods from more than 50 countries with a heavy emphasis on Asia. "Our people tell us nothing is happening right now. The good news is that we have all of our Christmas merchandise in the DCs already and it's being pushed out to our stores as we speak.

"So, if there's any disruption, it wouldn't be until January or February."

"We do take a lot in from the West Coast sourced out of Asia," said John Simley, a spokesman for The Home Depot, which has been working through the West Coast Waterfront Coalition, a watchdog group, to encourage a negotiated solution. "We have no side in this issue. The longshoremen and the Pacific Maritime Association must come to a fair and equitable agreement."

No work stoppages or slowdowns were reported last week after the talks broke off Sunday, with leaders of the ILWU declaring they would no longer extend the labor contract on a day-to-day basis, as they had been doing since the former agreement expired July 1.

Contract talks began last May but have moved forward in a stutter-step fashion as the union, which represents more than 10,000 workers at 29 ports, has periodically broken off the talks, effectively claiming bad-faith negotiations by the shippers' association.

The union walked out yet again last week after accusing the shippers of using "bait and switch" negotiating tactics.

The PMA denied the allegation and fired back that it might lock the workers out of their jobs if any slowdowns occur.

At the center of the most recent dispute was the issue of linkage — tying agreements on individual issues to a consensus on the main issue. The ILWU charged that the employers reneged on a promise to negotiate issues singly; the PMA countered there could be no final agreement on individual issues unless there was agreement on all.

Additionally, there was an implied threat that if any job action took place, President Bush might invoke provisions of the Taft-Hartley Act that would force union members back to work for an 80-day cooling-off period.

Job security for the dock workers remains at the core of the dispute. The PMA's member companies are seeking the introduction of labor-saving technologies they say will keep them competitive and profitable.

The PMA has countered that its offer includes job protections, early retirement offers and wage increases.

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