On Friday, the labor agreement covering more than 22,000 dock workers and 29 West Coast ports from California to Washington, representing approximately 40% of U.S. imports, expired. Negotiations between the Pacific Maritime Association (PMA) employer group and the International Longshore and Warehouse Union (ILWU) are ongoing.

Promo Perspective:

“Any interruption in port operations would have a tremendous impact on our members’ access to their imported products,” says Maurice Norris, PPAI public affairs manager. “With American companies and consumers never having recovered from the multiple pressures of the Section 301 tariffs, inflation and international shipping troubles, the timing couldn’t be worse for further import disruptions.”

The White House has been actively involved in the labor negotiations since they began. United States Secretary of Labor Marty Walsh has met with both sides regularly since negotiations began and President Biden met with the ILWU and PMA in Los Angeles on June 10. PPAI has joined with more than 150 trade organizations in a letter to President Biden urging the Administration to remain involved in the discussion and push for a contract extension as it will provide assurances for businesses, workers and consumers who rely on the West Coast ports.

The letter notes, “We know that there are significant issues for both parties that need to be worked out during this contract negotiation. The only way to resolve these issues is for the parties to remain at the bargaining table and negotiate in good faith. Extending the current contract would provide additional certainty to all of the supply chain stakeholders that rely on the U.S. West Coast ports. This is even more important as we continue to experience supply chain disruptions and congestion for a variety of reasons.”

PPAI and its fellow signatories call on the White House to work with the ILWU and PMA to:

  • Extend the current contract until a final contract is reached.
  • Commit to remain at the negotiating table and negotiate in good faith.
  • Agree to not engage in any kind of activity that leads to further disruption at the ports.

The Negotiations:

The talks between the PMA and ILWU began in May, with negotiations covering hours, wages and working conditions, among other issues. Reportedly, a sticking point in the PMA/ILWU discussions have been the role of automation in the ports.

  • The PMA has released a report highlighting how automating the movement of containers would support future growth at the ports and the ILWU has opposed it on employment grounds.

While there hasn’t been a dock worker strike in the U.S. in more than 50 years, there have been local disruptions. When talks broke down after nine months, an eight-day work-slowdown hobbled the flow of trade and cost Southern California’s economy alone more than $8 billion.

Shippers remain cautious, however.

  • Cargo is being routed away from West Coast ports to avoid potential labor-related disruptions.
  • Costs and congestion in ports from New York to Houston is on the rise due to the redirection.

While no agreement has been reached, both sides seem committed to continuing operating as normal until a deal is reached. On Friday, the ILWU and PMA put out a joint statement noting, “While there will be no contract extension, cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached between the Pacific Maritime Association and the International Longshore & Warehouse Union.

“Both sides understand the strategic importance of the ports to the local, regional and U.S. economies, and are mindful of the need to finalize a new coast-wide contract as soon as possible to ensure continuing confidence in the West Coast,” the ILWU and PMA joint statement said.