NFI/Cal Cartage to Close Port of L.A. Facility After Union Battle, Controversies
NFI Industries announced plans to close its 600,000-square-foot warehouse at the Port of Los Angeles in the wake of a decision by the Los Angeles City Council not to extend the lease on the 85-acre facility.
The Cherry Hill, N.J.-based third-party logistics provider said in a Jan. 16 press release that the facility, which handles goods for retailers that include Amazon.com, Lowe’s, Sears/Kmart and TJ Maxx, will be shut down in July. The closure will lead to the elimination of 800 jobs.
The Los Angeles City Council last October voted against extending the lease for the facility, which is operated by NFI subsidiary California Cartage. Cal Cartage has been at the location for more than 50 years; NFI acquired the company in 2017.
Last spring, the Los Angeles Board of Harbor Commissioners, whose members are appointed by the mayor and city council, approved the lease and sent it to City Hall for a council vote. In October, the council rejected the lease and sent it back to the Harbor Commissioners to renegotiate the contract and begin looking for a new tenant in the event talks with Cal Cartage stalled.
The warehouse sits on land owned by the Port of Los Angeles.
“This is a very sad day for Cal Cartage, our employees, our customers and the Wilmington community,” Sid Brown, CEO of NFI, said in a statement sent to Transport Topics. “We have been fighting, with the help of our employees, for the past four months to negotiate a deal to keep this facility open long term. This is not the outcome we wanted.”
NFI ranks No. 17 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
For several years, the International Brotherhood of Teamsters and the company have been engaged in a battle over unionization of an estimated 500 employees.
In 2016, the Teamsters lost a vote to unionize the facility during an election in which the union accused the company of using implied threats of termination and physical aggression to prevent employees from organizing.
The company in the Jan. 16 statement charged that the Teamsters have “spread misinformation and untrue statements about Cal Cartage as part of its continued effort to organize Cal Cartage’s employees.”
“Because of the Teamsters’ efforts, we now have been left with no other option but to shut down the Wilmington operation,” Brown said.
Fred Potter, the director of the union’s port division, said in a statement, “NFI management has rejected every single effort to resolve outstanding issues raised by port truck drivers and warehouse workers employed at the Wilmington property.”
Pier 400 at the Port of Los Angeles. (Tim Rue/Bloomberg News)
NFI/Cal Cartage is the target of several lawsuits in California. This month, the Los Angeles City Attorney’s office sued NFI/Cal Cartage and two other companies for allegedly violating the state’s Unfair Competition Law, which broadly prohibits unlawful, unfair or fraudulent business practices, including giving one business an unfair advantage over its competitors. NFI/Cal Cartage was accused of misclassifying port truck drivers as independent contractors, which the city said denied them legal wages and evaded taxes.
Since 2015, the California Labor Commission issued 36 citations against the company for misclassifying company drivers as independent contractors rather than employees. The state ordered the company to pay $7.3 million to those drivers; it settled 12 of those cases and is appealing the other 24.
Once NFI/Cal Cartage leaves the facility it is not clear what will become of the warehouse, which dates back to the 1940s.
Cal Cartage said it would move its customers’ warehouse operations to its other three locations in Southern California, and the departing employees would be eligible for severance payments.
