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Port peace

Dockworkers and shippers appear headed for a new contract. That's good news for the local economy.

June 28, 2008

While the media breathlessly follow the talks between the studios and the Screen Actors Guild, negotiators in a much less glamorous industry are quietly trying to avert a strike that could be more damaging to the local and national economies.

The six-year contract that covers about 25,000 dockworkers up and down the West Coast expires Tuesday. The last time the contract came due, in 2002, there were union work slowdowns that prompted a 10-day lockout by shippers, driving President Bush to invoke the rarely used Taft-Hartley Act of 1947 to compel operations to resume. The dispute cost the U.S. economy an estimated $15 billion.

The ports of Los Angeles and Long Beach handle roughly 40% of the nation's container cargo, and the international trade business employs more people in L.A. County than Hollywood does, so there's every reason to take the current dock talks seriously. Fortunately, a repeat of 2002 is very unlikely. Despite what looked suspiciously like a saber-rattling stunt by union leaders two months ago, the two sides show every sign of being close to a deal.

On May 1, thousands of West Coast dockworkers stayed home, an action that leaders of the International Longshore and Warehouse Union described as a protest of the Iraq war. More likely, it was a demonstration of union power directed at the Pacific Maritime Assn., the organization of cargo carriers, terminal operators and stevedore companies that oversees union contracts. The two sides later got past their biggest stumbling block, reaching agreement on the details of a healthcare plan. Still under discussion are such items as wages, pensions and safety procedures. The longshoremen would be wise not to try to push shippers too hard on these issues, given the stresses the industry faces in the current economy.

Shippers are being squeezed from many directions this year, starting with fuel costs that are putting a serious crimp in profits. In addition, the local ports have initiated ambitious pollution cleanup plans that will raise the cost of moving goods. And a shaky U.S. economy is likely to result in a slowdown in demand for imports, even as China's growing middle class is creating a domestic market for the country's own manufactured products that could slow its export traffic.

That creates a powerful incentive for both sides to settle their differences quickly and amicably -- and avoid a replay of 2002.

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