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From Jobs To Car Parts, Port Dispute Rippling Through The Economy


We're going to begin this hour with the slowdown at ports along the West coast and the impact of this on businesses near the ports and around the country. Deliveries of everything, from truck parts to blue jeans, are being delayed as shipping companies and dock workers try to agree on a new contract. Shipping companies had stopped work altogether over the holiday weekend, but operations are moving again, slowly. NPR's Kirk Siegler and Sonari Glinton teamed up for this report from the ports of Los Angeles and Long Beach.

SONARI GLINTON, BYLINE: The are about two-dozen huge container ships anchored out on the water here waiting to get into the ports. Things are so congested, if they could get in right now, there wouldn't be any room for them on the docks. So to show how what's going on here in Long Beach affects the broader economy, we're going to focus on two things.

KIRK SIEGLER, BYLINE: OK, so Sonari's going to take the global later on and I'm going to start with the local impact. About a billion dollars of cargo comes through this port every day and tens of thousands of jobs are directly connected to the port. Now, a little while ago, I met Jose Barela. He's one of the independent truck drivers who hauls the cargo containers off the docks to nearby rail yards and warehouse distribution centers across Southern California.

JOSE BARELA: (Speaking Spanish).

SIEGLER: Now, he tells me he essentially hasn't been able to work for two to three weeks now. Before all the congestion and the labor dispute, he would typically get three to four cargo loads a day.

BARELA: (Speaking Spanish).

SIEGLER: But now, Barela says, the line just to get into a terminal is so backed up that he could wait there all day and not come back with any cargo containers. It's just not worth it, he says. So if this continues - or worse, if there's a strike or a lockout - there will be no work and no pay for those truck drivers - 10,000 and counting here - so there's a lot of anxiety. And Sonari, it's easy to see the country's supply chain is very strained.

GLINTON: So Kirk, it's not just people who work on the docks and immediately around them that are worried right now.

SIEGLER: Which brings us to the Subaru dealership here in Long Beach just up the street from the port.

GLINTON: Now, Subaru is a special case. They're one of the fastest-growing car companies, and demand for their cars is very high. Before we drove down to Long Beach, I spoke by phone with Michael McHale.

MICHAEL MCHALE: We've been selling at such high levels for so long that base supply has been very low for a while, so we really can't afford any interruptions.

GLINTON: And Subaru's not just worried about the flow of cars coming in from overseas, but they're also worried about the parts for cars assembled here.

MCHALE: Well, like all good companies, we have a plan B. And plan B at the moment means air freighting some of those parts that have to go from the port to the factory. By air it's expensive, and it's complicated, and it's not the ideal way to do it. But at least it keeps the production line running and it keeps the cars being produced.

GLINTON: So far there are estimates that industry-wide, about 30,000 cars haven't been built because of slowdowns. And carmakers are starting to get nervous.

STEPHANIE BRINLEY: Cars can have well over 3,000 parts. Not having one of those 3,000 parts can mean you can't finish the car.

GLINTON: Stephanie Brinley is an analyst with IHS Automotive. She says labor disputes are unpredictable, and carmakers are unsure when or if to find alternatives to West coast ports.

BRINLEY: You don't know exactly when it's going to end. And so it's a gamble to try and figure out - and just look at the situation and with all the information that they do have, make the best decision that they can at that particular moment.

GLINTON: Kirk, even if there is a deal between the shipping lines and the dockworkers union, it could take weeks, even months, to clear out a backlog.

SIEGLER: And the longer the wait, the bigger the impact not just on this dealership here where we are, but the wider economy.

GLINTON: Reporting from Long Beach, Calif., I'm Sonari Glinton.

SIEGLER: And I'm Kirk Siegler, NPR News. Transcript provided by NPR, Copyright NPR.

Sonari Glinton is a NPR Business Desk Correspondent based at our NPR West bureau. He covers the auto industry, consumer goods, and consumer behavior, as well as marketing and advertising for NPR and Planet Money.
As a correspondent on NPR's national desk, Kirk Siegler covers rural life, culture and politics from his base in Boise, Idaho.