U.S. business fears disaster at peak of shipping season

If the labor dispute between 29 west coast U.S. ports represented by the Pacific Maritime Association and the union representing the 10,500 longshoremen the association has locked out over allegations of work slowdowns is not resolved within a few days, U.S. exporters are fearing disaster at the peak of shipping season.

"We’ll start to feel it in seven days," said Peter McGrath, senior vice president of department store chain J.C. Penney, which has up to $30 million worth of coats, sweaters and boots stuck in the Port of Los Angeles. "We would have a mess on our hands at that point."

Dockworkers have been locked out since the weekend.

Even businesses that had anticipated the work stoppage and stockpiled their inventories face troubles. For example, New United Motor Manufacturing, which manufactures vehicles with engines and transmissions shipped from Japan through the Port of Oakland, has accumulated seven to 10 days worth of imported parts at its Fremont, California plant. It would normally keep just six hours worth of inventory and the extra inventory is adding greatly to company carrying costs, according to company spokesman Michael Damer.

Truckers up and down the coast are also affected. They are unable to make their deliveries to the ports and many are not being paid.

About 32 percent of total value of American merchandise is shipped through California’s 29 ports.