With deadline way past due, now is the time for a West Coast port labor deal to be struck

The push for a new West Coast port labor deal continues….with no end in sight? OK, that is an exaggeration, but, yes, that is what it feels like, at times., to be sure.

Not all that long ago, there were clear signs of optimism, or progress, in terms of a deal being reached between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA).

The ILWU represents port workers in California, Oregon, and Washington, with more than 30% of U.S. incoming container traffic moving through West Coast ports at the Ports of Los Angeles and Long Beach, according to industry estimates. The PMA represents shipping lines and terminal operators at 29 West Coast ports. And the contract, which expired on July 1, 2022, represents more than 22,000 dockworkers at all 30 U.S. West Coast ports.

While both parties keep things very close to the vest, as recently as just a few weeks ago, there was the feeling, or at least the potential, of a deal getting done, however past due it may be.

In fact, a May Wall Street Journal report observed that contract talks between the parties “appear to be headed into their final stretch following agreements on several major issues, potentially clearing the uncertainty that has been hanging over U.S. importers heading into the crucial fall selling season.”

And as previously reported, the WSJ report cited officials “familiar with the matter” noting there are hopes that a tentative agreement may be done by June, which would be welcome news for West Coast ports that have seen cargo exit to East and Gulf coast ports over the last several months, with volumes down, as shippers looked to have their bases covered, in the event that labor talks were to completely break down.

There were also other positive indications prior to that, too.

On April 20, the ILWU said that it had reached a tentative agreement with the PMA “on certain key issues,” adding that talks are continuing on an ongoing basis until an agreement is reached.

“The union and the employer previously announced on July 26, 2022 that they had reached a tentative agreement on terms for maintenance of health benefits,” said ILWU in a statement. “The parties also issued a joint press release on February 23, 2023 announcing that they continue to negotiate and remain hopeful of reaching a deal soon. The parties have agreed not to discuss the terms of the tentative agreements as negotiations continue.”

But that optimism may have proved to be premature, given some fresh signs of labor strife between the parties, PMA said this week.

“Over the weekend and continuing today, the ILWU has continued to stage concerted and disruptive work actions that have slowed operations at key marine terminals at the Ports of Los Angeles and Long Beach, and elsewhere on the West Coast, including the Ports of Oakland and Seattle,” said PMA officials. “Union leaders are implementing many familiar disruption tactics from their job action playbook, including refusing to dispatch workers to marine terminals, slowing operations, and making unfounded health and safety claims.

The ILWU’s coast-wide actions since June 2 are forcing retailers, manufacturers, and other shippers to shift cargo away from the West Coast in favor of ports on the Atlantic and Gulf coast. Much of the diverted cargo may never return to the West Coast…ILWU job actions drive business and jobs away to other parts of the country, and further erode confidence in West Coast ports. Too much is at stake for this harmful disruption to continue.”

Meanwhile, in its own statement, ILWU officials observed that the PMA represents more than 70 multi-national ocean carriers and maritime companies in contract negotiations with the International Longshore and Warehouse Union (ILWU), adding that PMA member carriers and terminal operators made historic profits of $510 billion during the pandemic and in some cases, profits jumped nearly 1000%.  

“Even as shipping volumes return to normal in 2023, PMA members have continued to post revenues that far exceed pre-pandemic times by billions of dollars,” said ILWU.

It also made the case that from pre-pandemic levels through 2022, the percentage of ILWU wages and benefits continued to drop compared to PMA rising revenues.  

“Any reports that negotiations have broken down are false,” stated International President Willie Adams. “We are getting there but it’s important to understand that West Coast dockworkers kept the economy going during the pandemic and lost their lives doing so.  We aren’t going to settle for an economic package that doesn’t recognize the heroic efforts and personal sacrifices of the ILWU workforce that lifted the shipping industry to record profits.”

These recent developments were followed by the National Retail Federation calling for the PMA and ILWU to finally reach a new deal.

“The United States ports, particularly those on the West Coast, play a critical role in the vitality of the American economy,” said NRF Senior Vice President of Government Relations David French. “Thousands of retailers and other businesses depend on smooth and efficient operations at the ports to deliver goods to consumers every day. As we enter the peak shipping season for the holidays, these additional disruptions will force retailers and other important shipping partners to continue to shift cargo away from the West Coast ports until a new labor contract is established. It is imperative that the parties return to the negotiating table. We urge the administration to mediate to ensure the parties quickly finalize a new contract without additional disruptions.”

The NRF has been vocal about the need for a new deal to come to fruition, and they are not alone, as other associations and industry groups are all sending the same message, with that message being: it is well past time to get a deal done.

The time for posturing is over. It has been nearly a year since the last deal expired. Not only does cargo hang in the balance, but so, too, do jobs, economic strength, and the prospect of current and future supply chain cohesion. Let’s go, already, it is time.