How bad was coverage of the port strike?

It was pretty bad - frankly, some of the worst local business reporting I've seen in a while. There's a lot to find fault with, but it starts with the one number that has dominated news reports (and was parroted by local officials) for the past week: That the economic impact of the walkout was running $1 billion a day. LAT columnist Mike Hiltzik explains why that number was bogus from the start:

The cargo reaching Los Angeles/Long Beach over the last eight days hasn't been tossed into the sea as a dead loss. Much of it has been diverted to other West Coast ports or to the Panama Canal. The Marine Exchange of Southern California, which tracks vessel traffic, says 20 ships have been rerouted, leaving 13 container vessels at anchor as of Tuesday. The idled vessels contain about $650 million in cargo, a port spokesman told me. Some cargo is still making its way across the Pacific, some at a slower pace ordered by shippers hoping to stall its arrival until the strike is over.

So how did that figure start making the rounds? Well, Jock O'Connell, a trade analyst at Beacon Economics, says it inadvertently came from him. Here's what he said on KCRW's "Which Way, L.A." earlier this week:

It's basically my fault. I got a call from a newspaper reporter in Los Angeles last week asking what the economic impact of the strike would be, and I very carefully tried to point out to him that it's something we wouldn't know until well after the strike had ended and we had an opportunity to do the post mortem [to] determine how many workers had been idle throughout the supply chain, not just in Southern California and the ports, and to determine how many retailers had been affected by not having goods delivered in a timely manner and how many manufacturers had been unable to complete export transactions.


When asked for a hard and fast figure on the economic impact, I told him that about the only thing I could really give him was an estimate that was based on historical flows of trade on the order of $1.125 billion worth of goods were passing through the ports of L.A. and Long Beach every day at this particular time of year. Unfortunately that got into the newspaper and the next thing I knew everybody was talking about the $1 billion a day loss associated with this stoppage.

You can see why reporters and headline writers would want to grab onto that big, round number. What better way to legitimize a complex business story? But the estimate should have been discounted for any number of reasons - not the least of which being that goods sitting outside the L.A. port complex would eventually get to market, thus minimizing losses for manufacturers, retailers, and the port workers themselves. It will take many weeks to find out the actual dollar losses - a lifetime in media years. Of course, there are other unanswered questions:

--What are the terms of the deal? Neither side is talking.

--Why did the union decide to strike in late November - well after the holiday rush?

--What led the full International Longshore and Warehouse Union to honor the picket lines of the relatively small clerical unit? (At first the strike only affected a single terminal.)

--Are the union claims of outsourcing legitimate?

--Are the shipping operators' claims of featherbedding legitimate?

--How big a role did Mayor Villaragosa play in reaching an agreement? He's essentially taking credit for saving the day.

Very few reporters have a handle on these questions because news organizations have next to no presence at the ports. Shipping, you see, is simply too much of a hassle to cover. Sources are uncooperative, the industry itself is extremely secretive and nearly impossible to follow, the stories aren't all that exciting, and, don't laugh, San Pedro isn't easy to get to. So aside from rewriting port press releases and covering Harbor Commission meetings, it's basically ignored - until there's a strike.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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