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West Coast dockworkers reach contract deal with port operators

By Nagasunder in US business news, posted June 18, 2023

Following a year of contract negotiations characterized by numerous delays and a decline in cargo movement at ports along the West Coast, union dockworkers and port operators have reached a preliminary agreement that is set to span six years.

Late on Wednesday, the International Longshore and Warehouse Union and the Pacific Maritime Association issued a joint statement announcing the tentative contract, which will cover 22,000 workers across 29 ports from San Diego to Seattle.

These ports are among the busiest globally.

Specific details about the agreement have not been disclosed at this time, but it is expected to be officially ratified by both parties.

President Biden, who intervened last year to encourage a prompt resolution, released a statement commending the two sides for reaching an agreement "after a long and sometimes contentious negotiation."

He said: “As I have always said, collective bargaining works.

“Above all I congratulate the port workers, who have served heroically through the pandemic and the countless challenges it brought and will finally get the pay, benefits and quality of life they deserve.”

Furthermore, President Biden expressed gratitude to Julie Su, the acting U.S. labor secretary, for her assistance in finalizing the deal.

Julie Su, previously the head of the California Labor and Workforce Development Agency, was nominated by President Biden in February to succeed Martin J. Walsh as labor secretary.

However, her nomination has faced delays in the closely divided Senate.

The outcome of these negotiations bears some resemblance to previous instances. In 2015, during talks that extended over nine months, the Obama administration intervened due to work slowdowns and escalating congestion at the ports.

This marks the second time within six months that the Biden administration has intervened in a labor dispute that had the potential to significantly impact the U.S. economy.

In December, President Biden signed legislation to impose a labor agreement between rail companies and their workers.

Looking ahead, there is the looming possibility of another disruption to the nation's freight system.

The contract between the Teamsters and United Parcel Service, which covers 340,000 workers, is set to expire on July 31, and the union is expected to announce the results of a strike authorization vote on Friday.

The negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association have primarily centered on disagreements over wages and the increasing role of automation.

Unionized workers at the ports currently earn average salaries in the low six figures.

West Coast dockworkers reach a contract deal with port operators

Last year, both sides announced partial agreements on various aspects, including healthcare benefits, but kept negotiations largely confidential.

Workers have previously staged work slowdowns at the ports of Los Angeles and Long Beach, resulting in these ports losing substantial business to counterparts along the Gulf and East Coasts.

Cargo processing at the Port of Los Angeles, a vital entry point for shipments from Asia, was down by approximately 40 percent in February compared to the previous year.

Ports along the West Coast have established a job ecosystem spanning warehouses, trucking, and railroads for several decades.

For instance, in Oakland, over 84,000 regional jobs rely on the city's port.

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Additionally, around 13,000 truck drivers are authorized to collect cargo from the ports of Los Angeles and Long Beach.

Christopher S. Tang, a distinguished professor at the University of California, Los Angeles, Anderson School of Management, specializing in supply chains, expressed uncertainty regarding a potential rebound in shipping volumes at the Pacific ports.

“Many firms have shifted their supply base from China to Southeast Asia and Mexico,” said Mr. Tang. “For many Southeast Asian countries, it is cheaper and faster to ship to the East Coast instead of the West Coast.”

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Mr. Tang added: “West Coast ports need to do more marketing to woo shippers, importers and exporters back.”

The U.S. Chamber of Commerce recently wrote to President Biden, urging immediate intervention in the negotiations and the appointment of an independent mediator to facilitate an agreement between the two parties.

Matthew Shay, president of the National Retail Federation, expressed concerns about the ongoing delays and disruptions, emphasizing the adverse impact on retailers and other stakeholders reliant on the West Coast ports for their business operations.

He said: “As we enter the all-important peak shipping season for holiday merchandise, retailers need a seamless flow of containers through the ports and to their distribution centers,”.

On Wednesday, Gene Seroka, head of the Port of Los Angeles, said in a release that the preliminary agreement between the I.L.W.U. and the Pacific Maritime Association would provide the stability and confidence that customers have been seeking.

Matt Schrap, CEO of the Harbor Trucking Association, a trade group representing transportation companies serving West Coast ports, expressed eagerness for cargo traffic to swiftly return to normal.

“We need the certainty,” he said. “This has been a long, hard process.”

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