After negotiations broke down again in the acrimonious labor dispute between longshoremen and shippers in western U.S. ports, President Bush initiated the Taft-Hartley process Monday, which will allow him to declare an 80-day cooling off period and order Pacific Maritime Association terminal operators and shipping lines to end their  lockout of the longshoremen's union, which began about ten days ago (see 'West Coast Shippers Lock Out Longshoremen Indefinitely').  The dispute has paralyzed shipments of toys and games from manufacturing plants in China, where most plastic figures are made.  And in a sign that negotiations have reached a new low point, the union and PMA had different stories about the most recent round, with the union saying that they'd offered to go back to work for a week with no conditions and the PMA saying that the union had offered to go back to work only if technological changes at the heart of the dispute were taken off the table.

 

Although retailers are already beginning to see an effect on shipments (with WizKids, for example, unable to get its most recent shipments out of port), the impact will be much more serious in the coming weeks if the dispute is not resolved quickly.  Since the lockout started, product that was previously unloaded has still been moving through domestic distribution channels, but that's likely to come to a screeching halt quickly.  And even if President Bush does invoke Taft-Hartley, and the longshoremen work at full speed (something that's very much in question), with hundreds of ships either waiting to be unloaded or about to arrive at port, it will probably take weeks to work through the backlog.  Toys are also likely to be low in a list of priorities that includes food products, critical parts for factories, and other more time-sensitive shipments.   This is rapidly turning from a theoretically bad situation for holiday shipments to one that is all too real.