Mexico port picks up slack from strike at L.A., Long Beach complex

By Ricardo Lopez and Walter Hamilton, Los Angeles Times

Dec. 4, 2012 12 AM PT

ENSENADA — This sluggish port city is coming alive.

Standing atop a pier with a hulking cargo ship behind him, dock manager Rogelio Valenzuela Gonzalez motioned Monday toward four cranes as they plucked metal containers from the vessel.

Operators swiveled the cranes toward a line of flatbed trucks. Supervisors in reflective vests and hard hats watched from below, using two-way radios to dispatch trucks as they filled up.

Not even during the peak fall shipping season is this port so busy.

But a strike that has effectively shut down rival ports in Los Angeles and Long Beach has diverted ships south of the border. It has become a windfall for the port located about 50 miles from the border, its workers and the region’s struggling economy.

“It’s good for the workers’ families,” said Gonzalez, adding that the extra work will pay for additional Christmas presents. “We all know it’s temporary, but it definitely helps out at the end of the year.”

The Southern California strike ended its first week Monday, with negotiations continuing but no signs of an immediate resolution.

The strike by the International Longshore and Warehouse Union Local 63 Office Clerical Unit, which handles paperwork for incoming and outgoing ships, has crippled the nation’s two busiest cargo ports.

The dispute centers on the charge by the union that employers — large shipping lines and terminal operators — have steadily outsourced jobs through attrition. The union says the employers have transferred work from higher-paid union members to lower-paid employees in other states and countries.

The employers dispute that claim, saying they’ve offered the workers full job security and generous wage and pension increases. Though the union has only 800 members, the 10,000-member dockworkers union is honoring the picket lines.

Economists estimate the effect of the work stoppage at $1 billion a day in forfeited worker pay, missing revenue for truckers and other businesses and the value of the cargo that hasn’t been able to reach its destination. The two ports are directly responsible for an estimated 595,000 jobs in Southern California.

But while thousands of Southern California workers sit idle in Los Angeles and Long Beach, the walkout is giving Ensenada a hoped-for chance to showcase itself.

Collectively, Los Angeles and Long Beach handle 100 times more cargo each year than Ensenada.

Long seen as a backup port, Ensenada is eager to win more business from shippers inconvenienced by the second major work dispute at the L.A. and Long Beach ports in a decade.

“It’s a great opportunity to show that the Port of Ensenada presents an alternative method for bringing in products from Asia and the Pacific Rim,” said Kenn Morris, president of Crossborder Group, a San Diego consulting firm. “The Ensenada port can really show itself off as being something a lot of people hadn’t expected.”

Uncertain how long the strike may last, retailers have scrambled to find alternate ways to get their products onto shelves. Given their typically thin profit margins, retailers are concerned about the added shipping costs.

“These blockages are dead-weight losses to the system,” said Carl Voigt, an international business professor at USC. “They raise costs for everybody. Everybody’s goods and services are more expensive.”

Ensenada is used to seeing the occasional cruise ship and maybe half a dozen cargo ships a week. Two ships have made unplanned dockings and unloaded cargo here in the last week. Three others have docked in Manzanillo, a Mexican port city 1,200 miles to the south of Ensenada.

Altogether, 17 ships bound for the L.A. or Long Beach port have been diverted elsewhere, including nine to Oakland, one to Mazatlan, Mexico, and one to Panama.

In Ensenada, dockworkers made quick work unloading 100 cargo containers from the Maersk Merlion. The giant cargo vessel was diverted over the weekend and docked early Monday morning.

Since late last week, Ensenada has been preparing for a hoped-for influx of diverted ships. The port has 200 dockworkers when operating at capacity, and an additional hundred clerical and customs workers.

Equipment is on standby. Workers are at the ready. And trucking lines have been placed on alert that cargo may need to be hauled.

“It’s hard to guess how many ships we’ll receive, but we are preparing for more,” said Juan Carlos Ochoa, the port’s trade development manager.

Ensenada is still handicapped by longer-standing obstacles, primarily its lack of railway access to move goods.

And for now, the cargo unloaded from the Maersk Merlion will sit at the port as the shipping line weighs whether to move it by truck to its final destination or have another ship pick up the containers at a later date.

The strike “is an extraordinary situation,” Gonzalez said. “But it’ll show our clients that this port is a good option. It’s efficient, reliable and secure.”

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Lopez reported from Ensenada, and Hamilton from Los Angeles.