California Apparel News

This summer is shaping up to be the season of discontent for getting goods in and out of the ports of Los Angeles and Long Beach, Calif.

The shipping season, which revs into high gear in July, will get a jolt with the threat of an independent truckers strike at the two Southern California ports on or close to June 1. No one is sure how long the proposed strike would last.

Unhappy drivers are calling for shipping lines to compensate them or their companies for diesel fuel prices to haul goods out of the ports. Diesel fuel prices are currently pegged at $2.23 to $2.30 a gallon, having increased nearly 50 percent in the last year.

“We don’t haul freight for a loss. We’re not a government agency,” said Stephanie Williams, executive vice president of the California Trucking Association, whose 2,500 members are independent truckers. “The truck operators are striking.”

Williams said the trucking association is not calling for a strike because the organization is not a union but a lobbying group based in Sacramento, Calif. However, California Trucking Association executives have heard rumors that there will be a work stoppage similar to the one that crippled the Port of Oakland for nearly one week in early May. At one point during the strike, the Northern California port operated at only 5 percent of capacity, said Harold Jones, a Port of Oakland spokesman. At other times during the strike, it operated at 25 percent of capacity. Port officials later got a temporary restraining order to keep truck drivers from blocking port entrances.

There was a similar strike on April 30 at the ports of Long Beach and Los Angeles.

Some shipping lines, however, are compensating truckers for higher diesel prices. APL, a shipping line whose U.S. headquarters are in Oakland, Calif., began paying independent trucking companies a fuel surcharge when diesel prices hit $1.67 a gallon, said APL spokesman Scott Dailey.

Trucks and trains

“There is word on the street and fliers out there that there will be a strike,” Williams said, noting that about 90 percent to 95 percent of the trucks serving the ports of Long Beach and Los Angeles belong to independent owner/operators who could be participating in the labor movement. While the trucking association has heard the strike would occur on June 1, others have heard it would occur at the end of June.

This only complicates this summer’s shipping situation. Already, rail transportation out of the two ports has slowed because of a workers shortage at the Union Pacific Corp., one of the two railroad companies that service the ports by loading containers onto rail cars and transporting them across the country. The other railroad company is the Burlington Northern Santa Fe Railway.

One month ago, Union Pacific acknowledged it needed to hire 4,000 workers this year because a number of longtime employees were able to retire two years earlier than expected. Union Pacific, based in Omaha, Neb., said it underestimated the number of railroad employees who would retire after a new federal law lowered the retirement age for employees with 30 years of service from 62 to 60. The law, implemented two years ago, left the railroad company short of locomotive engineers and conductors, creating its worse shipping delays in six years when Union Pacific merged with the Southern Pacific Rail Corp.

Some of the worst problems are in Southern California, where about one-quarter of Union Pacific’s freight originates or ends up. This logjam is happening just as the U.S. economy is picking up steam, imports from Asia are growing, and West Coast ports are preparing to accommodate new mega-ships carrying 8,000 20-foot containers. The new ships, which will begin calling on West Coast ports in the latter half of the year, will replace ships carrying 5,000 to 6,000 20-foot containers.

Union Pacific has asked customers such as United Parcel Service Inc. to forgo transporting freight by rail and use trucks instead.

The railroad problem already has created a delay in getting containers out of the Southland’s major ports even though it is not the busy freight season.

“The delays are in the order of one or two days,” said Art Wong, a spokesman for the Long Beach port. “But this is still part of our slower time of the year. Union Pacific says they are bringing more people on line and that the situation won’t get worse. But it remains to be seen.”

Similar delays are being experienced at the Port of Los Angeles, said Theresa Adams Lopez, a spokeswoman for the Los Angeles port.

In Oakland, APL, one of Union Pacific’s biggest users of the stack-train system that puts two containers on one railroad bed, has experienced two- to three-day delays in getting containers on trains. “As far as the summer goes, we are going to have to wait and see,” Dailey said.

Working on the railroad

Union Pacific spokesman Mark Davis said the railroad has begun hiring hundreds of people to operate the trains. During the second quarter of this year, the company added 879 people to its employee roster. Many of them should be trained by the end of the summer or early fall to start filling the labor gap. “We are seeing improvements, but it is not where we want it to be,” Davis said.

Davis could not predict when Union Pacific’s railroad activity would return to normal. He did say the company anticipated it would have to hire 3,500 people a year for several years because veteran workers are opting to retire at age 60.

None of this bodes well for getting goods out of the ports quickly during this year’s prime shipping season, which will begin in July and last through October, when most holiday goods will be brought in.

“My prediction is that it is going to be a horrible season full of all kinds of delays and problems,” said Greg Owen, president of Ability Tri-Modal Transportation Services, a consolidator in Carson, Calif. “First, you have these fuel prices and disgruntled independent trucking contractors. Then you have organized labor trying to organize the trucking people. Undoubtedly, longshore labor will sympathize with them and have possible slowdowns to cause more havoc.”

Indeed, the International Brotherhood of Teamsters—whose 1.4 million members include truck drivers, zookeepers and nurses—have been trying to organize the independent truckers who deliver goods in and out of the ports.

“We have always wanted to organize them,” confirmed Teamsters spokesman Galen Munroe. “They are the most exploited drivers on the road.”