BLOOMBERG NEWS The office clerical unit of Local 63 in Los Angeles, which represents 750 clerks in the International Longshore and Warehouse Union, has threatened to strike if its contract demands are not met. Above, cargo ships sat docked in the Los Angeles port in 2004.

L.A. port strike would slow isle freight

Hawaii residents, forced five years ago to scramble for food and supplies during an 11-day West Coast dockworkers lockout, may need to improvise again if contract negotiations break down between office clerks and their employers at the ports of Los Angeles and Long Beach.

This time, any potential shutdown doesn't figure to have as much impact in Hawaii as it did in 2002, because other ports in Oakland, Calif., and Tacoma, Wash., would continue operating. But global supply chains have become even more sensitive to such disruptions.

"We live in this "just in time" economy where we've benefited in terms of low-cost merchandise, but we're vulnerable to small disruptions," Bank of Hawaii chief economist Paul Brewbaker said.

Brewbaker said many of the efficiencies that make ocean transportation logistics so productive today, namely improvements in technology and the retail distribution system, work by reducing stockpiles of inventory sitting in warehouses.

"So we don't have the kind of buffer we used to have, which is a good thing because it's costly to maintain inventory, but it does make us somewhat more vulnerable if disruptions occur," he said. "But it's my sense it's a little bit too premature to bring out the catastrophic scenario."

Matson Navigation Co., the largest ocean shipper serving Hawaii, and Horizon Lines Inc., the state's No. 2 shipper, both are monitoring the Southern California situation. The office clerical unit of Local 63, which represents 750 clerks in the International Longshore and Warehouse Union, has threatened to strike if its contract demands are not met.

The 15,000-member ILWU has indicated that longshoremen would honor picket lines if the clerks strike. Negotiations, which were recessed yesterday, were scheduled to resume this morning.

Dave Hoppes, Matson's senior vice president of ocean services, said yesterday he was reluctant to say anything about possible contingency plans for fear of inflaming the situation.

Matson has two ships that service Honolulu from Long Beach, one of which continues on to Guam and Asia. Matson also has two ships serving Hawaii from Oakland and one from Seattle.

Mar Labrador, Horizon's vice president for Hawaii, Guam and Micronesia, said Horizon would be affected but he couldn't say by how much.

Horizon has two ships that go between Los Angeles and Honolulu and two ships that go Tacoma-Oakland-Honolulu. It takes two ships to be able to serve Hawaii on a weekly basis.

The ports of Los Angeles and Long Beach account for 40 percent of all the cargo container traffic coming into the United States.

Brewbaker said that in the end, what really matters is "if you have enough toilet paper."

"When it hits certain commodity groups, like toilet paper, rice and spam, that's when it really starts to bite," he said.