It was nothing short of a nightmare. More than 200 ships carrying 300,000 containers, waiting at anchorage or at the dock to be discharged. Railcars and intermodal shipments parked all over the country, with no place to go. U.S. and Asian exports filling warehouses, meat freezers and grain elevators to overflowing. Towering piles of containers that were accumulating faster than railroads and trucks could move them off the docks. And dozens of U.S. businesses laying off workers, cutting back hours or halting production altogether.

Just about everyone involved in international trade is struggling to cope with the aftermath of the shutdown of 29 West Coast ports in late September. That shutdown, which lasted nearly two weeks, resulted from an employer lockout of International Longshore and Warehousing Union (ILWU) members. The lockout began on Sept. 28; on Oct. 7, President Bush, citing concern over the economic impact of the lockout, invoked the Taft-Hartley Act by appointing a board of inquiry and directing Attorney General John Ashcroft to seek an injunction against the Pacific Maritime Association (PMA), which represents ocean carriers and terminal operators. A federal district court judge issued a temporary restraining order, sending longshoremen and clerks back to work on Oct. 9.

On Oct. 16, the judge formally ordered a 60-day "cooling off" period for both union and management. During that time, they may continue negotiations but must maintain normal operations. After 60 days, if no agreement has been reached, the board of inquiry will issue a report that includes the negotiating parties' current positions, what steps have been taken to resolve the dispute, a statement by each party of its current position and a statement of the employers' last offer. After that, the National Labor Relations Board has 20 days in which to conduct, tally and certify the results of a secret ballot of ILWU members. At the end of the 80 days, the injunction will be lifted. If the ILWU employees have rejected the PMA's final offer in the secret ballot, then the parties are free to again engage in work stoppages. (For an outline of the Taft-Hartley dispute resolution process and an overview of the potential economic impact of the work stoppage, go to www.whitehouse.gov/news/releases/2002/10/20021007-5.html).

In the meantime, dock workers, terminal operators and carriers are pressing on with the daunting job of clearing the existing backlog and accommodating new shipments, but work is going slowly. ILWU officials accused the PMA of deliberately requesting insufficient labor, and the PMA claimed that union members were purposely working too slowly.

The slowdown question aside, importers and exporters will be facing an array of logistical headaches for weeks to come, says Robin Lanier, executive director of the West Coast Waterfront Coalition of shippers, carriers, ports, terminal operators and other stakeholders. These include:

• Additional charges, such as the Trans-Atlantic Conference Agreement's proposed $500 per 20-foot equivalent unit (TEU) congestion surcharge, and demurrage or detention charges for containers that were caught in terminals during the lockout.
• Force majeure, a clause in ocean bills of lading that has been invoked by several carriers. Force majeure protects carriers when they cannot fulfill the terms of the contract of carriage due to natural disasters, civil unrest or labor actions. Shippers are likely to incur hefty additional costs for transportation of cargo that has been diverted to other ports because carriers that have declared force majeure are not obligated to absorb those costs. In addition, Lanier noted in one of her daily news updates, cargo that was diverted to Mexico or Panama may require additional security inspections at the importer's expense.
• Customs clearance headaches for cargo that has been delayed or diverted. U.S. Customs has issued directives regarding the order in which it will process entries for cargo on ships that were stuck at anchor or at the dock, were diverted to other U.S. or to foreign ports, or were subject to quotas that are drawn down with each entry and were close to filling at the time of the work stoppage.
• Rail delays for agricultural exports and intermodal shipments. Railroads had embargoed all containers headed for West Coast ports and had stopped accepting grain and other perishable agricultural shipments. At press time, such cargo was once again moving but under a permit system that allocates capacity to shippers.
• Insufficient availability of chassis, which are owned and maintained by ocean carriers, and of local drayage drivers, who are subject to hours-of-service restrictions.
• A shortage in Asia of empty containers for exports to the United States. Shippers of high-value commodities that can't get equipment have turned in many cases to air freight, but the sudden demand has sent charter rates soaring, according to forwarders.

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