February 12, 2015 / 7:41 PM / in 3 years

UPDATE 1-U.S. West Coast ports undergo partial shutdown

(Adds contract talks resume, updates tally of idled freighters and action on Capitol Hill)

By Steve Gorman

LOS ANGELES, Feb 12 (Reuters) - The 29 ports on the U.S. West Coast were effectively closed to cargo freighters for the second time in less than a week on Thursday under a partial shutdown imposed by shipping lines and terminal operators in an escalating labor dispute with the dockworkers’ union.

The loading and unloading of cargo vessels was halted for 24 hours as of Thursday morning, and the companies said those operations will be suspended - as they were last weekend - again this coming Saturday, Sunday and Monday, unless a contract settlement with the union is reached.

The two sides returned to the bargaining table on Thursday morning for the first time in nearly a week, meeting with a federal mediator at the union’s headquarters in San Francisco.

Officials for the International Longshore and Warehouse Union, representing 20,000 dockworkers who have been without a contract since July, say they are very close to a deal with the companies’ bargaining agent, the Pacific Maritime Association.

But the PMA says the talks hit a snag over a new demand by the union for changes in the system of binding arbitration of contract disputes.

In the meantime, inbound cargo vessels continued to stack up at anchor, with about two dozen freighters left idle on Thursday morning waiting for a berth outside the ports of Los Angeles and Long Beach, the nation’s two busiest cargo hubs. At least 28 more vessels were reported to be waiting at anchor or circling outside ports in San Francisco Bay and Puget Sound.

The numbers are likely to grow by the end of the weekend as additional vessels arrive from Asia with no place to park at the docks.

SUPPLY CHAIN CRUNCH

The affected ports handle nearly half of all U.S. maritime trade and more than 70 percent of imports from Asia. Severe congestion at those harbors has rippled through the U.S. commercial supply chain, disrupting deliveries of a wide range of goods, from agricultural produce to house wares and apparel.

Citing months of chronic slowdowns in freight traffic they blame the union for instigating, the companies said they were unwilling to pay union workers higher holiday and weekend wages while productivity declines and the cargo backlog grows.

Union shifts worked this Thursday and next Monday would command premium pay in observance of separate Presidents Day holidays falling on Abraham Lincoln and George Washington’s birthdays.

Union officials said the shippers were engaged in brinkmanship, using the partial shutdown to exaggerate the magnitude of the crisis and exert economic pressure on union members.

The West Coast ports were not left entirely dormant, however. The companies said work will continue in the dockyards, rail yards and terminal gates as they seek to clear some of the cargo containers already stacked up on the waterfronts.

The companies have accused the union of orchestrating work slowdowns since October to gain leverage in negotiations, saying the ports are at the brink of total gridlock. The union has faulted changes in shipping practices instituted by the carriers themselves for the worsening backlogs.

Retail and manufacturing groups, which project that a full, extended shutdown of the ports could cost the U.S. economy $2 billion a day, have urged the Obama administration to intervene to keep the two sides at the bargaining table until a deal is done.

U.S. Representative Dave Reichert, a Republican from Washington state, said he planned to introduce a resolution in Congress on Thursday urging a swift settlement to the labor dispute. Eighty-four members of Congress signed a Jan. 30 letter calling on the parties to come to terms quickly.

The White House has said it was monitoring the situation and that it was up to the parties to resolve their own differences. (Reporting by Steve Gorman; Additional reporting by Krista Hughes in Washington; Editing by Lisa Lambert, Bernard Orr)

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