California Apparel News

Apparel manufacturers and retailers are wringing their hands, worried that a series of problems at Southern California’s ports may delay overseas shipments when goods start arriving for the Backto- School and Holiday seasons.

“We are monitoring the situation daily,” said Ron Perilman, president of City Girl Inc., a Southern California company that imports most of the womenswear it sells under the Nancy Bolen, Ruby Cho and Marie St. Monet labels.

Even though City Girl has not experienced any drastic delays in receiving goods, the company is awaiting seven containers of apparel scheduled to arrive in the next few weeks. “We really feel that what happens in the next couple of weeks could impact us greatly,” Perilman said.

The ports of Los Angeles and Long Beach have been walloped by a number of tough issues just as the shipping season heats up and imports are at an all-time high.

Of utmost concern is a looming strike by the office clerks who process the paperwork and documentation for ships’ containers.

The 750 clerks are members of the International Longshore and Warehouse Union’s Local 63 Office Clerical Unit. (These are not the marine clerks who work on the docks.)

The office clerks’ three-year contract with 16 maritime companies expired at midnight on June 30, and negotiations broke down early on July 4 after 21 hours of negotiations.

The two sides resolved most of the wage and healthcare issues in negotiations that started on April 22. Currently, clerks’ wages start at $33 an hour. Healthcare benefits are 100 percent covered by employers.

The major sticking point is technology and how it could affect the clerks’ job security, said John Fageaux Jr., president of Local 63 OCU. New software programs allow customers to access the shipping lines’ computers and input their own bookings without the help of the clerks. Clerks fear they may become obsolete.

The two sides reconvened for informal negotiations on July 7 and July 8 in Long Beach.

If the technology issue is not resolved soon, union officials said, the clerks will strike and set up a picket line that will undoubtedly be honored by ILWU members, said ILWU spokesman Steve Stallone.

The 16 maritime operators involved in the labor negotiations include China Shipping Group, China Ocean Shipping Co., Maersk Sealand, Orient Overseas Container Line Ltd., Matson Navigation Co. Inc., Long Beach Container Terminal Inc., International Transportation Services, and Pasha Stevedoring & Terminals.

The union will have contract talks later with the American Presidents Line and the Marine Terminals Corp., Fageaux said.

The impending strike is reminiscent of the scenario that transpired when the ILWU’s contract negotiations for a sixyear pact got bogged down in late 2002 over concerns about job security and technology implementation. A 10-day lockout by shipping lines created havoc at West Coast ports while stores waited for key holiday items.

“Let’s keep our fingers crossed,” said Robert Krieger, president of Norman Krieger Inc., a Los Angeles customs broker and freight forwarder. “We all know what happened last time when management and labor didn’t come to terms. It was the importers who lost big time.”

Labor shortage

If a looming strike weren’t enough, a shortage of longshoremen is delaying goods being loaded off container ships arriving at the ports. Both ports are experiencing 10 percent to 14 percent year-to-date increases in container volume over last year.

Shipping lines have been augmenting the workforce of unionized longshoremen, who receive $28 an hour plus health benefits and a pension plan, by hiring casual workers who earn about $20 an hour and have no health benefits, Stallone said. Casual workers are not allowed to operate cranes and large forklifts.

Currently, there are 5,000 longshore laborers, 1,500 marine clerks and 500 foremen who work in the twin port complex in Los Angeles and Long Beach, Stallone said. There are about 3,800 casual workers, who sometimes have second jobs.

The ILWU estimates that 1,500 longshoremen need to be trained and hired to meet rising demand. The Pacific Maritime Association, the bargaining arm of the steamship lines, noted that more than 800 casual workers became unionized longshoremen last year.

“We have been telling the employers for a year that they need to register more people. They have registered some but not enough,” Stallone said. “It was a problem everyone knew was going to happen, and we pleaded with them to resolve it in time.”

Consequently, there are not enough gangs to offload ships coming into port. On July 7, the ports were 56 gangs short. It takes anywhere from four to five gangs, with eight to 15 workers each, to unload a ship.

The labor shortage has had a domino effect on ships waiting to dock, truckers waiting to unload containers and manufacturers waiting for goods.

On July 7, there were 63 ships at the two ports and 19 anchored beyond the breakwater waiting for berths, said Capt. Manny Aschemeyer, executive director of the Marine Exchange of Southern California, which coordinates vessel traffic for the two ports.

“The backup hasn’t exploded yet,” Aschemeyer said. “We are kind of holding our own.”

He noted that during the October 2002 lockout, there were as many as 65 ships anchored offshore waiting to dock.

Trucks and trains

To complicate things, independent truckers have been threatening to strike to protest rising dieselfuel prices. But the truckers did not join in a nationwide port strike on June 28 that affected the East Coast.

In addition, the railroads that service the ports, the Union Pacific Corp. and the Burlington Northern Santa Fe Corp., are still coping with worker and equipment shortages caused by early retirements and increased business. Those issues probably will not improve until the end of the year.

All these elements have importers guessing what will happen in the next few months. No one is sure.

“I don’t have a crystal ball to tell you what we will be seeing during peak season,” said Enrico Salvo, chief executive officer of Carmichael International Service, a Los Angeles customs broker and freight forwarder that works with apparel manufacturers. “I just tell people to go to church on Sunday and pray.”