West Coast Port Labor Talks Set for May Ahead of July Expiry

By Laura Curtis (Bloomberg) —

Talks to hammer out a new labor contract for West Coast dockworkers will start May 12 ahead of the current contract’s expiration on July 1, Jim McKenna, the chief executive of the Pacific Maritime Association representing carriers and terminal companies, said Wednesday.

The expiring contract covers about 22,000 West Coast dockworkers — represented by the International Longshore and Warehouse Union — and their employers, ocean carriers and port operators, represented by the PMA. 

Some past disputes between the union and the PMA have proved crippling for shipments to the western seaboard, stoking fears of a repeat just as dockyards work to clear backlogs of goods brought on by pandemic disruptions and historic consumer demand for goods.

ILWU President Willie Adams said he’s “optimistic” about the talks and that the union is looking forward to sitting down with the employers in May.

“The union and the employers sat down early on in the pandemic and negotiated pandemic protocols that allowed the cargo to keep moving,” Adams said in a statement. 

Two years of record consumer spending have seen cargo loads hammer ports, particularly on the U.S. West Coast, with delays and congestion, and workers are seen as having additional leverage as carriers have seen record profits in a tight market. While wages and benefits are frequent sticking points, the employers’ right to automate could emerge as a particularly thorny issue.

Timeline 

McKenna said the talks will most likely start at PMA offices in San Francisco, then move to union offices and alternate week by week.

“I have no idea what their demands will look like other than the normal hours, wages and working conditions, right? Automation will be a hot topic of discussion as we get into these negotiations,” McKenna said.

In 2014, the last time the union’s contract expired, the talks dragged on for months and only came to an end when the White House got involved. According to an analysis by Copenhagen-based Sea-Intelligence, it took the shipping industry eight to nine months after a deal was reached in February 2015 to return to normal service.

High Stakes

“I think everybody is concerned and rightfully so, if the supply chain is disrupted any further than it is right now, it’ll be disastrous,” McKenna said. In previous years, shippers had the option to route goods through Canada or ports on the East Coast if a labor dispute slowed or stopped West Coast ports. But this year stressed supply chains have already jammed up alternatives, he said.

The White House has said it is keeping a close eye on the talks this time. McKenna said their involvement has so far been “very limited.” 

“I don’t think we need we need help at the table,” McKenna said, but pressure from the White House — or anybody with a stake in goods movement on the West Coast — is welcome. “We need to get this done without any further disruption in the supply chain.”

Labor Secretary Marty Walsh said he’s ready to assist.

“I’ll be as involved as they need me to be,” he said in an interview Tuesday. “If they need me, I’m willing to be helpful. If they don’t need me, that’s a great thing.”

McKenna said there’s a 50-50 chance the talks will conclude smoothly and before July 1. It may be too optimistic to say there won’t be any disruption before understanding what the demands and obstacles are, but “we are certainly trying to accomplish that. There will not be a lack of trying.”

–With assistance from Josh Eidelson.

© 2022 Bloomberg L.P.