Work at ports along the West Coast has returned to normal after the International Longshore and Warehouse Union and shippers settled a bitter contract dispute.

Companies tally losses
from dock walkout

By Justin Pritchard
Associated Press

SAN FRANCISCO >> Businesses are still tallying the billions they lost during and after the now-resolved West Coast port labor dispute, but damages may not be as high as some initial estimates. Holiday shoppers, meanwhile, won't likely feel too pinched.

"People will be able to get things under the Christmas tree," said Joseph Miniace, president of the Pacific Maritime Association, which represents about 70 shipping companies. "Things may have gotten there a little bit late, but they will get there."

The association and the International Longshore and Warehouse Union ostensibly ended their dispute, which led to a 10-day lockout this fall at 29 major Pacific ports, with a tentative six-year contract signed late Saturday.

While union leaders lobby the 10,500 dockworkers who still must approve the pact, businesses with any stake in Pacific Rim trade are exhaling after what for them was a nerve-racking showdown.

The exact economic toll may not be known for months.

But, eventually, analysts will likely agree the U.S. economy lost billions, according to economist John Martin, whose Pennsylvania firm estimated port shutdown costs for the maritime association.

His widely quoted projections were that a 10-day shutdown would drag the economy down about $19 billion. That's probably about right, he said.

"It's better in some ways and worse in others, and we're trying to sort through that," Martin said Tuesday.

For starters, shipping lines and port terminal operators from the maritime association lost about $400 million, industry officials said. Union members likely lost tens of millions in wages during the lockout.

Other trade-dependent industries may have been hit ever harder by a Catch 22 -- if they didn't stockpile goods ahead of expected problems on the waterfront, they risked losing sales; if they did, they had to pay storage costs that add up quickly.

Martin suggested businesses lost billions in opportunity costs alone because goods were delayed in the ports for weeks after the gates reopened Oct. 9.

During that period, impacts were legion.

Auto plants shut down. Grain shipments were backed up into the Midwest. Truckers fumed as they idled in long lines as the ports creaked back to activity. Del Monte was forced to unload tons of bananas at West Coast food pantries. Major League Baseball didn't receive promotional giveaway cameras in time for Game 4 of the World Series.

Losses probably ran into the millions for New United Motor Manufacturing Inc., a General Motors and Toyota assembly plant near San Jose that closed for two days before it began chartering planes to fly in car parts from Asia. The truck line remained idle for five days.

If those shipment expenses weren't bad enough, labor costs swelled as well -- the plant kept paying its 5,000 workers even when production stopped, and then paid overtime to recoup the 3,000 trucks and 1,500 cars it didn't produce.

"Regrettably, those are costs that we need to absorb, we can't pass those on to customers," said plant spokesman Michael Damer.

A spokesman for American Trucking Associations, one of the industries that felt the pain immediately, guessed firms and self-employed drivers lost hundreds of millions of dollars.

Now, with docks back to a near-normal flow, truckers are hauling goods and stores aren't bracing for a supply chain disruption.

Pacific Maritime Association

International Longshore and Warehouse Union

E-mail to Business Editor


Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
© 2002 Honolulu Star-Bulletin --