LOS ANGELES — Union Pacific Corp. notified customers this weekend that it has indefinitely stopped moving international marine containers from the Midwest to the West coast ports where a lockout of dockworkers has brought to a standstill the movement of cargo, reports Dow Jones Newswire.
Union Pacific said it notified all of its customers Saturday evening that it wouldn’t accept anymore international marine containers billed to West Coast ports due to the lockout of union dock workers by a shipping association involved in tough labor negotiations, said Jennifer Hamann, assistant vice president in charge of investor relations with Union Pacific.
The Omaha, Neb., railroad is the world’s biggest railroad. Hamann also said that Union Pacific is looking at consolidating several trains that move freight from the West Coast ports to points across the country as the Pacific Maritime Association has locked out all dock workers at 29 ports through at least 5 p.m. EDT Monday.
“It doesn’t make sense to move the containers west because then we would be storing the containers on the system, clogging it up,” she said.
She also said that the move to consolidate the numbers of trains headed east from the West ports could happen soon as there are no containers being unloaded at the docks.
“We probably aren’t far from getting into that stage,” she said. Union Pacific has reported strong intermodal container volumes in its 2002 second and third quarters as worries by retailers and manufacturers about the longshoremen’s strike increased.
A spokesman with Burlington Northern Santa Fe Corp. (NYSE:BNI – News) was not immediately available for comment on the impact of the lockout. The group representing West Coast shipping lines and terminals said Friday it would lock out 10,500 dockworkers from their jobs at all 29 West Coast ports through the weekend as part of a “cooling-off period.”
The Pacific Maritime Association, or PMA, which represents shipping lines and terminals in the West, has been negotiating with the International Longshore and & Warehouse Union, or ILWU, since May in what has become increasingly tense labor negotiations.
The PMA said ILWU-sponsored slowdowns, beginning with Thursday’s night shift and extending to Friday are what led the PMA board of directors to vote later Friday to implement a “defensive shutdown” of the ports beginning at 9 p.m. EDT Friday. The contract covering the ILWU workers expired on Sept. 1, and the longshore workers and shippers have been unable to work out a replacement contract since.
Shippers are worried about slowdowns unloading ships and other work stoppage disruptions, while the dock workers want job security and assurances that introduction of technologies in the ports won’t displace workers. Any prolonged work stoppage could have grave consequences for the U.S. as retailers have stocked their inventories well in advance of the Christmas holiday season, leading already to a logjam in the transportation infrastructure. The ports handled more than $300 billion in cargo last year, and are estimated to sap about $1 billion daily for each day the ports are closed.
The White House has said it would intervene in the talks should the dockworkers strike. In labor disputes involving industries key to the national interest, the White House has the power, under the Taft-Hartley Act, to order employees back to work during an 80-day cooling off period.