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When the International Longshore and Warehouse Union (ILWU) labor contract expired on July 1, there was hope that contract talks would be settled quickly in a world where companies continue to grapple with supply chain shortages, logistics disruptions, labor constraints and fluctuating transportation rates. That hasn’t happened. In fact, more than three months later, the labor negotiations between the ILWU and the Pacific Maritime Association (PMA) are still taking place.
The bargaining agreement covers over 15,600 dockworkers at 29 ports, including thousands that work at the Port of Long Beach and Port of Los Angeles, and who are members of the ILWU Locals 13, 63 and 94. They also cover port workers in Washington state. PMA represents 70 ocean carriers and marine terminal operators along the West Coast. For the union, the main issues are higher wages and automation that would eliminate jobs on the docks, according to the Los Angeles Business Journal.
Talks Hit an Impasse
While the ILWU and PMA have both agreed not to discuss the talks publicly, a spokeswoman for the ILWU told WSJ that negotiations “take time.” She also said that the union “remains committed to the process, with the goal of reaching a collective bargaining agreement with our employers that supports dockworker jobs and the American economy.”
The publication says West Coast port labor talks are “stalled” as dock worker disputes hit the region’s big trade gateways and hints that they could now take months to resolve. “Some maritime executives had hoped the talks, which began in mid-May, would conclude in the early fall,” WSJ reports.
“Now they worry the negotiations could continue through the end of 2022 or into 2023,” it continues, “extending uncertainty that has triggered shifts in trade flows and complicated planning in supply chains.” WSJ says ILWU members have been working without a contract since the last agreement expired, “leaving companies working without grievance machinery that allows for resolution of disputes between workers and their bosses.”
Supply Chain Impacts
According to the U.S. Chamber of Commerce, the prolonged labor negotiations are impacting both supply chains and inflation rates. “While the business community continues to recover from last year’s historic congestion at our West Coast ports, they are closely watching the railroads and West Coast ports negotiate new contracts with their workers,” it says.
“Much is at stake with these negotiations,” the Chamber continues, “and history shows that these negotiations are frequently difficult, including service disruptions that can snarl supply chains and disrupt delivery schedules.” It adds that when the port terminals and ILWU started negotiating the new agreement, both sides said it would be “highly unlikely” that a new contract would be in place before the previous contract expired. Ports were expected to operate normally while negotiations continue.
“Previous negotiations over the last 20 years saw at least one short-term service disruption that snarled supply chains and hurt businesses, which is giving concern to the business community while the current negotiation continues,” the Chamber points out. On a positive note, it says both sides “appear to be making progress,” and that the ILWU had already reached a tentative agreement with the port terminals on employee health benefits.
However, negotiations may have hit an impasse due to an operating issue at a specific port, plus some global issues like the automation of processes at the ports. “In the meantime, service levels at the West Coast ports remain steady,” the Chamber adds. “While it is still unclear when these negotiations will conclude, it is important for both sides to arrive at an agreement without any service disruptions while also allowing our nation to meet the growing trade flowing through our West Coast ports.”
One positive sign came on Sept. 20, when Bloomberg reported that the head of the port of Long Beach told Bloomberg that he didn’t see a prolonged negotiation in the cards. “I do believe that we’re not going to have a prolonged negotiation much less any slowdown or strike — so I’m very comfortable with how we are right now at the nation’s largest and most significant gateway,” he said. “This is not what we saw in 2014 (when the prolonged negotiation process caused myriad transportation stoppages and delays), by no means.”
