Longshoreman Union Could Cost USA Economy $2 billion A Day

If a growing active labor dispute between the Longshoreman workers and the ports of Los Angeles and Long Beach escalate to full blown port shut-downs, a devastating economic disaster will rock the California economy and the nation’s.

A shutdown forces cargo companies to ship their merchandise through other points of entry and could result in a permanent loss for both ports. The workers have intentionally decreased their efficiency causing delays up to three weeks forcing dozens of cargo ships to remain anchored off the coast of Long Beach.

The intentional slowdown by the workers can cost the nation’s economy a mind boggling $2 billion per day.

The San Bernadino Sun reported that the International Longshore and Warehouse Union workers have been working without a contract since July. Although in August they seemed to have reached agreement with the ports on health benefits, the port managers representative Pacific Maritime Association contend that ILWU leaders have become more and more inflexible.

Robert Kleinhenz, chief economist for the Los Angeles County Economic Development Corp., said that the two ports are vital to Southern California’s economy:

The twin ports make up the largest port complex in the Western Hemisphere and 40 percent of the containers that arrive here from Asia come through the San Pedro complex International trade is one of the major industries that are crucial to expanding our local economy.

Last year managing discretionary cargo logistics provided nearly 54,000 direct and indirect jobs in California reported the Sun. Most of those jobs belong to workers who live in the Los Angeles and Long Beach area. On a broader scale, the management of the cargo containers at the two ports supported three million jobs nationwide.

Phillip Sanfield, a spokesman for the Port of Los Angeles expanded he statistic including as many 900,000 truck drivers, dockworkers, warehouse employees and others jobs relies on the two sides reaching agreement.

Dan Gardner a veteran shipping executive and supply chain consultant for consulting firm Trade Facilitators Inc. explained that

The big competitive advantage of the ports of Los Angeles and Long Beach is their proximity to Asia… It takes about 19 days longer to ship products on an all-water route through the Panama Canal and all-water shipping is less expensive. But if you add two to three weeks of delays at the ports here that advantage goes away. Importers would be compelled to use other ports.