Idle ports threaten Lake Tahoe
The West Coast cargo ship lockout has some South Lake Tahoe businesses — from auto parts store managers to hardware outlets — concerned about higher prices being passed down to the consumer.
As negotiations failed Tuesday, cargo valued in the hundreds of millions sat idle off the West Coast while port workers were ordered off their jobs for a second time in a labor dispute that could cost the nation an estimated $1 billion a day.
South Shore business owners and managers who depend on freight to keep their shelves stocked say the lockout, if carried out over several weeks, could cause prices to surge.
“It hasn’t affected us yet, but we are very concerned about it,” said Tammy Williams, manager of Ace Hardware in South Lake Tahoe.
While Ace gets its merchandise from a stocked warehouse in Rocklin, supplies could dwindle, especially as the holiday season nears when people are in the market to buy hardware and tools as gifts. Williams said her corporate office has been in contact with individual Ace retailers, and are addressing the needs of all stores.
Williams said there could be price increases if the lockout is extended.
“Depending on how long it goes, we could see an impact in about two weeks that would affect us,” Williams said. “Our prices would probably go up, and, unfortunately, that would be passed down to the customer.”
Shipping lines vowed to keep all 29 major West Coast ports closed until the longshoremen agree to extend their expired contract as the talks continued Tuesday in San Francisco.
The 10,500-member dockworkers union has refused to budge until the lockout ends. The two sides are at odds over pensions and other benefits, as well as the union’s demand to control any new jobs that would come with the introduction of modern cargo-handling technology.
West Coast grocers who depend on overseas produce from Central and South America, are also concerned.
Fortunately, much of the produce that’s in grocery stores now is domestic, said Dennis Schmedes, manager of Albertson’s Food and Drug Center in South Lake Tahoe.
“Right now we are in our shoulder season, where we are getting (produce) from California to Florida,” Schmedes said. “As we move more into fall, some of the shipments will be from South America.”
If that happens, as with items imported for the holidays such as ornaments, tree trimming supplies and toys, consumer prices could spike, Schmedes said.
Economists say consumer goods such as electronics and household appliances could be hardest hit, along with automotive parts, which get shipped from Asia.
A trickle effect could take a while to materialize, said Ed Hastings, manager of Kragen Auto Parts in South Lake Tahoe.
“Sure we’re concerned about it, but I don’t think it will affect us much because our company has big warehouses in Sacramento and Phoenix,” Hastings said.
For NAPA Auto Parts manager Bob Pederson, the South Shore car parts outlet is “a small cog in the wheel” because much of NAPA’s products are made in the United States.
“The good majority of NAPA’s products are made right here in the USA,” Pederson said. “Our company keeps its supply well stocked. But if (the lockout) goes for long enough, some of our brake parts that we do get overseas may not be stocked as well.”
Economists said a protracted work stoppage will disrupt much of the U.S. economy.
A five-day shutdown would wipe out $4.7 billion in wages and revenue, according to the Pacific Maritime Association, which represents shipping lines and sea terminal operators. If it lasts 10 days, the costs could snowball to $19.4 billion, said economist John Martin, who studied the potential impact for the PMA.
West Coast ports handled more than $300 billion in cargo over the past year.
Dozens of ships are waiting to be unloaded outside ports along the West Coast.
— The Associated Press contributed to this report.
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