Glitches Slow Down Movement of Port Cargo

L By Evelyn Iritani, Jerry Hirsch and Nancy Cleeland

lOS ANGELES – Billions of dollars worth of cargo that piled up at West Coast ports during the 10-day shutdown began moving out across supply chains Thursday – but not without glitches.

Meanwhile, representatives of the International Longshore and Warehouse Union and the Pacific Maritime Association employer group said they expected negotiations with a federal mediator to resume sometime next week.

As work at harbors from San Diego to Seattle resumed Thursday, shipping companies and freight forwarders were scrambling to locate empty truck trailers, which were in short supply because seagoing containers were piled on them during the lockout.

Railroads were hard-pressed to handle the demand. Although most containers move by truck, the rails have become a critical piece of the containerized shipping supply chain. With goods undeliverable during the lockout, rail carriers moved their equipment east, noted Steve Stallone, a spokesman for the ILWU.

Stallone said that in Oakland, Calif., alone, there are 36 ships in port – each with hundreds of rail containers aboard. But railroad officials are only accepting 180 containers a day, he said.

Union Pacific Railroad, one of the nation’s leading carriers, brought about 90 locomotives to Southern California in anticipation of Wednesday’s opening and expects to operate at least 30 percent more trains from the West Coast than normal in the coming days, according to Mike Furtney, a railroad spokesman.

“The best thing we can do is tell everybody to stay calm and wait for the situation to catch up,” he said.

The West Coast’s 29 ports opened Wednesday night after a federal judge granted President Bush’s request for a temporary injunction under the rarely used Taft-Hartley Act, launching an 80-day cooling-off period for both sides.

The Maritime Association, representing shipping lines and terminal operators, locked out the ILWU Sept. 29, claiming the union was engaging in disruptive work slowdowns to protest stalled contract talks.

Maritime Association spokesman Steve Sugerman described the work pace as “sluggish,” Thursday, and said the group continues to monitor the ILWU’s activity to determine whether there are any orchestrated slowdowns. The group is prepared to seek court sanctions against the ILWU if it believes a slowdown is in effect.

Union leaders, who have vowed to “work safe” following the deaths of five ILWU members on the waterfront this year, say the slow pace is a result of a backlog of containers and a shortage of staffing and equipment.

Although containers were moving out, port and shipping executives warned that the backlog of tennis shoes, computer parts, Halloween decorations and scores of other goods was so huge that it would take weeks before the trans-Pacific supply chain was back to normal.

“It’s not unreasonable to expect that we’re going to feel the impact of this work stoppage for at least another six weeks,” said Robert Kleist, an adviser to Taiwan-based Evergreen Shipping Line.

With each day of additional congestion, the bill for the port closure mounts.

Gap, the giant clothing retailer, warned Thursday that its fourth-quarter earnings could be 50 percent below expectations due to the port closure. And the Los Angeles Economic Development Corp. estimated that the 10-day shutdown cost the U.S. economy at least $5 billion, nearly half of that in California.

Even with everyone working overtime to get ships on their way, it will take weeks to work through the backlog because there are more vessels at sea, said Dick McKenna, executive director of the Marine Exchange at the Ports of Los Angeles and Long Beach.

Across the United States, businesses wondered when their freight would be delivered.

Miranda Su, vice president of sales and marketing for the Irvine, Calif.-based technology company IOGEAR, said she was desperate to get her firm’s containers of computer peripherals and networking equipment off a ship in Long Beach. If she fails, clients like Fry’s Electronics and will be caught without some of IOGEAR’s most popular products.

“We’ve been calling our freight forwarder on a daily basis,” she said. “We have got no answer yet.”