Small Union Shuts Down LA Ports -- 40% of The Nation's Import Trade

Updates

December 7, 2012: after 2015, it's going to be more difficult for longshoremen at the LA Port / Long Beach Port to hold their employees hostage. Read the story at the link to see what this is all about:

Savannah’s rise was fueled by competitors’ misfortune when a 2002 West Coast dock strike -- more sweeping than the just- ended walkout at Los Angeles/Long Beach -- spurred customers to divert traffic to other eastern ports. Savannah’s volume surged 32 percent in 2003.

“Economists anticipated it would drop off after the West Coast reopened, but the next year it grew even more,” Siplon said. “Here was this sleepy little port, and shippers realized they got all their boxes through. It was a big testing point for Savannah and they passed and haven’t looked back.”

December 4, 2012: Seventeen ships have been diverted to other ports since the strike began. One port that loves the business: Ensenada, Mexico. 

The Southern California strike ended its first week Monday, with negotiations continuing but no signs of an immediate resolution.

The strike by the International Longshore and Warehouse Union Local 63 Office Clerical Unit, which handles paperwork for incoming and outgoing ships, has crippled the nation's two busiest cargo ports.

The union won't accept a salary offer of $195,000, up from their current salary of $165,000.  Other unions have honored the strike.  Two words: Economic.Suicide.

Original Post

Link here to LA Times.

A judge ordered the union back to work but the union refused.

During the past several years there has been a move for shippers to find alternate ports. This could hasten those efforts. I haven't heard much about the huge new Mexican port lately.

"The danger here is that this could call into question the reliability of the San Pedro Harbor ports," O'Connell said. "The Wal-Marts and the Home Depots may be forced to think twice about relying on these ports as their primary gateway."

The San Pedro Harbor ports are the Los Angeles Port and the Long Beach Port.

From an old 2008 LA Times story:

Mexico's government is preparing to open bidding on the largest infrastructure project in the nation's history, a $4-billion seaport that could transform this farming village into a cargo hub to rival the ports of Los Angeles and Long Beach.

If completed as planned by 2014, the port would be the linchpin of a new shipping route linking the Pacific Ocean to America's heartland. Vessels bearing shipping containers from Asia would offload them here on Mexico's Baja peninsula, about 150 miles south of Tijuana, where they would be whisked over newly constructed rail lines to the United States.

My hunch: the strike will not last long. 

Foreshadowing The Great Recession of 2013: Longshoremen Don't Want To Strike ...

... either that or they saw what happened to the Hostess/Twinkie union employees when they went on strike ... which lasted about a week ...

Link here to KX News.

Longshore workers say they don't want to strike grain terminals in the Northwest, and want to continue contract talks with terminal owners beyond a Wednesday deadline.
International Longshore and Warehouse Union spokeswoman Jennifer Sargent said Monday that they have proposed additional dates for talks to the Pacific Northwest Grain Handlers Association, which represents the owners of 6 grain terminals along the Columbia River and in Puget Sound in contract talks.

This would be up in Portland, Oregon, I suppose. 

End of Coal Union in North Dakota?

Link here to the Bismarck Tribune.

The Coyote Station Power Plant is a coal-fired power station south of Beulah, North Dakota, with four owners and operated by Otter Tail Power, Fergus Falls, MN.

It currently receives its coal from the last union-operated coal mine in North Dakota: the Dakota Westmoreland.

In four years, 2016, the contract between the power plant and the coal mine will end. The power plant has announced that it will get its coal from a new non-union mine:

The Coyote Station owners announced last month they’ll switch to a new coal provider starting May 2016.

North American, owner of the two largest coal mines in the state and both non-union, will open a new mine they’re calling Coyote Creek Mining Co. just west of Dakota Westmoreland’s open coal pits.

Coyote Creek Mining Co. exists in coal lease documents for now. The Public Service Commission must issue a mining permit and North American won’t make application for the 13-square-mile reserve area until next year or possibly 2014, says its spokesman David Straley.

The contract would expire in 2040.

As usual, lots of story lines. Go to the link for more information. 

WSJ Wrap-Up for Thursday, June 14, 2012

Note: I read (present tense) the fourth section first and then work my way back toward the front section, saving the best for last, the editorials.

Note: if you want to see the story on-line, you can generally just "cut and paste" the headline inside the quotes into the URL -- you don't even have to go through Google. Try it. Copy the following inside the quote "GM's Opel To Close Car Factory in Germany"; add a new tab or open a new window; and, paste the copied phrase into the URL. 

"Dollars Become Scare as Argentina Cries Peso," p. C1.

So much for global warming: "Colder Forecasts Sink Gas Futures," p. C4.

Wow, wow, wow -- I remember blogging about this new joint refinery some weeks ago -- "Woes Hit Top US Refinery: After $10 Billion Upgrade, Falure Idles New Sections of Shell and Saudi Venture," p. B3. This is the on-line story posted yesterday.

The outage helped spur Gulf Coast spot-market prices for wholesale regular gasoline to $2.73 a gallon on Wednesday, up five cents from Friday. It also added support to gasoline prices at the New York Mercantile Exchange, which closed at $2.66 a gallon Wednesday, down from $2.69 Friday amid economic worries but on the rebound since Monday because of signs U.S. fuel demand is increasing, said Gene McGillian, a broker at Tradition Energy.

Meanwhile, Saudi Aramco is reviewing what to do with the huge amounts of so-called sour crude oil it has shipped to the refinery, said a person familiar with the company. The Saudis had agreed to supply Motiva with all the sour crude it needed for several months while it tested its expansion, because using only one type of oil made the start-up easier. Now the specter of millions of barrels of excess unrefined crude is having an impact on local oil prices in the U.S. Gulf Coast, one trader said.

"GM's Opel To Close Car Factory in Germany," p. B9. This story was getting a lot of coverage earlier this year. Now it's a small story buried in the WSJ. After you read the story: any wonder why unions are failing in the US?

The decision marks a critical step in GM's efforts to turn around its chronically money-losing European business, which has become the U.S. auto maker's biggest albatross since it emerged from bankruptcy three years ago. Opel is under intense pressure to slash excess capacity to help staunch its losses in the region's overcrowded and largely unprofitable auto market. Bochum, one of Opel's oldest and costliest sites, has long been viewed as a prime target for closure.

But the move to halt production in Bochum won't come as quickly as GM officials had hoped. As part of its negotiations with Germany's powerful labor unions, the auto maker said it was discussing holding off any compulsory layoffs in Germany until 2016, two years longer than its current labor agreement provides. GM could still pursue layoffs though negotiations with the union.

Despite tariffs: "US Solar-Panel Demand Expected to Double," p. B9.

"Asian Start-Up Acquires Saab Auto," p. B9. Some weeks ago I blogged about our Saab experience in Europe and Asia.

Product placement: huge Apple MacBook Pro in unrelated photo, p. B10. Apple's product placement is incredible. Most of it is not paid for by Apple.

I have no idea why new allegations against Lance Armstrong merits front page coverage, but there you have it. Lance is the George Bush of the sporting world.