The Shipping News

West Coast dockworkers and terminal operators are taking a time-out from their marathon negotiations for a new contract, agreeing to suspend their slow-moving talks until Aug. 14, 2002. The delay means imported merchandise and supplies — primarily from Asia — will continue flowing to U.S. retailers, if only temporarily.

Shipping companies and the dockworkers'union have been in talks for almost three months, but no new contract agreements have been reached. Members of the International Longshore and Warehouse Union (ILWU), which represents about 10,000 dockworkers, have continued to work while the talks have dragged on. The carriers, members of the Pacific Maritime Association, have said they might shut down ports if the unions conduct a work slowdown similar to the ones they conducted during contract negotiations in 1996 and 1999.

The ILWU asked to suspend the contract talks, claiming its negotiators are “burned out” and need to discuss strategy with the organization's rank-and-file. Last week, a union caucus rejected the latest contract proposal from the terminal operators, and gave union negotiators the authority to call a strike vote. However, ILWU officials said there were no current plans to call for a work stoppage.

A 10-day shutdown of West Coast ports (in California, Oregon and Washington) could cost the U.S. economy as much as $19.4 billion, according to one report. And while Asian imports of electronics and household items are significant, retailers'major concern with a strike at this time would regard apparel items, as they prepare for their back-to-school merchandising season. If the shutdown ran for a long enough time, the Christmas selling season could be affected.

Of the $40.6 billion in annual apparel imports, 52 percent are said to arrive through West Coast ports according to a Salomon Smith Barney report. And the peak shipping season for most apparel retailers runs from July through October.