California Small Businesses: 'Collateral Damage' in Port Dispute

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A container ship sits docked in a berth at the Port of Oakland on Feb. 11, 2015.  (Justin Sullivan/Getty Images)

The labor dispute at West Coast ports is heating up again.

Port operators announced Wednesday what amounts to a holiday weekend shutdown -- they won't hire crews to load or unload ships Thursday, Saturday, Sunday or Monday, when they'd have to pay Presidents Day holiday or weekend wages to dockworkers.

Cargo movement has been at virtual gridlock since mid-January, according to a Reuters report, stranding cargo containers at ports and idling ships at sea.

The labor dispute began last July, when the International Longshore and Warehouse Union's contract expired. The Pacific Maritime Association, which operates the ports, blames dockworkers for the gridlock in order to gain negotiating leverage. The ILWU blames changes on larger container ships and fewer trailers to haul them.


By one estimate, the congestion could cost retailers up to $7 billion this year. And that pain is being felt throughout California.

Small Businesses Taking a Hit

Bob Bibee owns Pedego Irvine. He employs four people in his Irvine shop, where electric bikes are assembled. But most of the parts, including bike frames, come from a factory in China and arrive by container ship at the Port of Los Angeles.

Bibee says he's managed to maintain an inventory of parts in his warehouse, but the port trouble has prevented him from getting frames and components for his 2015 models.

"At one point we had three containers just sitting out there, floating out there in the ocean outside of the San Pedro-Long Beach area, and there's nothing we can do about it," Bibee said. "I get customers calling on a daily basis asking where they are, what's happening."

Bibee said he tries to explain to potential customers what's going on and when he'll get the parts they want.

"I feel like they're starting to question our integrity," Bibee said. "And it's frustrating because there's absolutely nothing we can do about it."

Bibee says he's lost orders and that people have gone to shop elsewhere. He said he's built and given away bikes similar to what customers want to keep them happy until he can fill their actual order.

"So what that does to me is, I take a brand-new bike, I give it to them, and it comes back in three months beat up, and it costs me money on that side as well," Bibee said.

Lisa Foster is the owner of 1 Bag at a Time in Venice, and she has one full-time employee -- herself.

"Basically, small business owners like me become collateral damage," Foster said.

She sells reusable shopping bags, and her customers are mostly mom-and-pop shops. She says she's experiencing delays of up to seven weeks due to port slowdowns.

"You have to know that when these bags leave my factory, I have to pay for them. That delay is a seven-week delay in my paycheck," Foster said. "My orders are down, I would say about 20 percent, because people just don't want to order right now. I can't guarantee when it'll come in."

Foster said she's learned to become agile and hopes to have products to sell by Earth Day. She makes most of her profit for the year gearing up for Earth Day, which is in April.

"I may miss entirely the whole Earth Day and that'll be a big hit," Foster said. "My Earth Day is like Christmas for some other people."

Officials Urge an End to the Labor Dispute

The 29 West Coast ports are a big driver of the U.S economy and handle about $1 trillion of goods annually.

On Monday, Sens. Dianne Feinstein and Barbara Boxer urged an end to the labor dispute.

They sent a joint letter to the heads of the International Longshore and Warehouse Union and the Pacific Maritime Association.

They said that people and businesses that rely on the ports have already suffered significant economic damage as a result of what they called unacceptable and unsustainable congestion at the ports.

Queena Kim and Peter Jon Shuler contributed to this report.