California Apparel News

Nobody wants to remember the fiasco at the local ports last year when container vessels were stacked up beyond the breakwater at Los Angeles and Long Beach and it took as long as six weeks to clear goods off ships and on to store shelves.

Many apparel importers lost millions of dollars with late deliveries right before the holiday season while longshore workers and their employers hammered out a new labor contract and terminals handled a chassis-shortage problem at the same time.

When it was time this year for the port clerks to launch their contract negotiations in April, many importers were holding their breath and hoping things would move along swiftly, unlike a few years ago when the port clerks took two years to parlay a new three-year contract.

But the 600 full-time port clerks and 300 temporary clerks at the Port of Los Angeles and the Port of Long Beach have made great strides in this year’s negotiations for a contract that expires June 30.

Unlike the West Coast longshore workers, who bargain with one entity—the Pacific Maritime Authority—the port clerks must negotiate a new contract with each and every one of the 20 shipping lines and port terminal operators that are members of the Harbor Employers Association and employ the port clerks.

So far, the International Longshore and Warehouse Union, Local 63, Office Clerical Unit, which represents the port clerks, has signed new contracts with 18 of the 20 companies. The two remaining contracts left to sign are with Zim and theEvergreen Shipping Agency.

John Fageaux Jr., president of Local 63 OCU, said he hopes to start talks with Zim on Fri., May 13, and the contract with Evergreen is close to being signed.

The other good news is that the contracts are for seven years instead of the previous three-year terms. “I think our industry needed a longer contract, both from the employer side and the union side,” Fageaux said. “It provides the stability that the customers are looking for, and I think it is good for all parties involved.”

Those parties included customs brokers who were besieged by customers calling at all hours of the day and night wondering when their boxes of merchandise would be unloaded from boats waiting for dock space at the two ports.

“The consistency required in the supply chain is crucial. I am excited to hear they have been moving along,” said Mark Hirzel, chairman of the Los Angeles Customs Brokers & Freight Forwarders Association. “The port clerks have the ability to literally shut down the ports. If they were not able to negotiate a contract, they could strike and the longshore workers would not cross their picket lines. That has happened.”

That happened twice in the past few years. During the last contract negotiations, employers and clerks failed to reach an agreement by the June 30, 2010, deadline. Even though no contract was in place, the port clerks continued to work during on-again, off-again negotiations that took place for nearly two years.

Eventually the port clerks, whose job is to process shipping documents and whose duties are different from those of marine clerks, set up picket lines at two terminals in December 2011, and the longshore workers, represented by a different division of the ILWU, refused to cross the pickets. An arbitrator ordered the longshore workers back to work.

Then again in November 2012, clerks erected pickets at 10 of the 13 container terminals at the Port of Los Angeles and Port of Long Beach. Dockworkers refused to cross the picket lines and cargo handling was slowed for nearly a week. A new contract with the port clerks was finally signed and officially ratified by union members in February 2013.

During the last contract negotiations, one of the sticking points involved outsourcing of clerical work to nonunion workers in other states and countries.

Fageaux said that, in the past, employers were trying to get rid of language that for many years had required the shipping lines and terminal operators to fill jobs immediately when a vacancy occurred due to retirement, illness, vacation or a temporary leave. “We felt they tried to get rid of that language so they could move work away from Southern California and in some cases outside the United States,” he said. “By us securing that language, there is less of a motivation for an employer to move that job away.”

The new contracts call for a 3 percent annual wage increase and higher pensions.

Rising tides

The rapid path to a new port-clerk contract is a reminder that last year’s port congestion problems and labor issues pushed many importers to shift some of their cargo to other ports, such as in Miami, Houston and New York/New Jersey.

Many haven’t returned to the West Coast. In the first three months of 2016, Los Angeles and Long Beach took in only 37 percent of all containerized imports arriving in the United States, down from 43 percent during the same period in 2007.

More competition is coming on line with the Panama Canal finishing up its latest expansion project this June to widen and deepen its locks to accommodate larger vessels that carry up to 13,000 containers at a time instead of 5,000 containers.

That means it will be easier to ship containers directly from Asia through the Panama Canal and to the East Coast instead of unloading them in Los Angeles and Long Beach and transporting them across the country by rail or truck.

Los Angeles and Long Beach are working to make their ports more efficient—especially with larger cargo-container ships plying the waterways to save money on fuel and crew. The world’s largest container ships, launched in 2015 by Mediterranean Shipping Co., haul nearly 20,000 containers.

Late last year, the largest ship to ever call at a U.S. port arrived on the West Coast. The CMA CGM Benjamin Franklin has the capacity to carry up to 18,000 cargo containers and is one-third larger than the biggest ships that dock at the ports.

It arrived on Dec. 26 at the Port of Los Angeles before sailing to the Port of Oakland. Earlier this year, that same vessel docked at the Port of Long Beach in a test to see how workers unloaded the ship, which is as long as the Empire State Building is tall.

In other good news, the ILWU received a letter from its employers—who are members of the Pacific Maritime Association—asking the union to extend its current contract beyond the July 1, 2019, deadline to ensure that cargo flows reliably through the West Coast ports. Labor is taking that into consideration.

“After what we went through last year,” said Debra Taylor, a local customs broker and regional sales manager at Alba Wheels Up, “everybody wants to move forward.”