Each the Loadstar and the Journal of Commerce (JOC) report the Pacific Maritime Affiliation (PMA) and Worldwide Longshore & Warehouse Union (ILWU) have damaged media silence on their negotiations with a joint assertion to reassure shippers that each events are dedicated to negotiating a brand new contract with out port disruption. One would definitely hope so.
“Cargo operations proceed past the expiration of the contract. Neither social gathering is making ready for a strike or a lockout, opposite to hypothesis in information studies. The events stay targeted on and dedicated to reaching an settlement,” the PMA and ILWU reportedly stated.
I say reportedly as a result of the assertion doesn’t seem on the PMA’s nor the ILWU’s web site. Saying that neither social gathering is making ready for a strike or a lockout isn’t the identical because the events committing to not execute a strike or lockout. The historical past of labor slowdowns, port disruption, strikes, and lockouts throughout contract negotiations together with the contract expiration that means there’s not an lively settlement clause in opposition to strikes and slowdowns in place provides shippers and trade professionals loads of motive to be anxious.
Moreover, all of the congestion, port disruption, and record-breakingly (yeah, I might need simply made up that adverb) excessive freight charges over the past two years would make disruptions from contentious contract negotiations all of the extra devastating.
Ought to Shippers Really feel Reassured?
Ought to the PMA-ILWU assertion make shippers optimistic that these negotiations gained’t flip expensive for them? In all probability probably the most hopeful factor from the assertion is that it got here from the events collectively. That reveals some cooperation on the a part of the union and employers. It’s additionally one thing that’s considerably uncommon throughout contract negotiations.
Getting this assertion is certainly higher than listening to information of negotiations being suspended as occurred in Could. The ILWU requested that suspension, and the union refused to remark afterward. The PMA additionally didn’t say why the negotiations had been suspended, but it surely was reported that the ILWU was in no rush to get negotiations for the brand new contract carried out.
President Biden Met With PMA & ILWU
On Friday, President Biden did have a sit-down with the PMA and ILWU. Shippers have despatched a pair letters to the White Home, requesting that the president achieve this – or a minimum of do one thing to make sure port disruption like what happened throughout the contentious contract negotiations of 2014-15 doesn’t repeat itself. The most recent such letter was despatched final week on Wednesday.
Good on the president for assembly with the dockworker union and its members’ employers on the topic two days after the letter. “Good on the president” isn’t one thing I’ve gotten to say an excessive amount of since Joe Biden took up the workplace.
The PMA and ILWU’s assertion makes it clear there gained’t be a brand new contract earlier than the present one expires on July 1st, however we already knew there wouldn’t be. The assertion most likely didn’t give us any actual new data, however a minimum of it reportedly confirmed what the events mentioned with President Biden:
“The events mentioned with the president a number of points, together with provide chain congestion and their shared dedication to succeed in a collective bargaining settlement that’s honest to each events.”
PMA’s Posted Negotiations Feedback
Whereas the PMA’s web site, on the time of this writing, doesn’t share the joint assertion made with the ILWU, it does have a popup that reads:
PMA’s negotiations with the ILWU for a brand new labor contract on the 29 West Coast ports are critically vital for the well being of jobs, companies, and communities nationwide. As historic provide chain congestion continues, it is important that either side attain settlement with none disruption on the ports. We’re happy with our collaboration with the ILWU throughout this extraordinary interval, and hopeful that spirit of cooperation will proceed as we pursue a brand new settlement.
The popup then provides a hyperlink to a bit of the web site dedicated to negotiations. There, you will discover a video from PMA’s President and CEO Jim McKenna, by which he will get into the problem of collaboration with the ILWU.
The above-mentioned video was launched simply earlier than contract negotiations have been about to get underway, and McKenna devoted a major period of time within the video to what’s regarded as probably the most heated difficulty between the events: automation.
Right here’s what McKenna needed to say about automation:
We should modernize our terminals to attain higher cargo throughput and accommodate rising cargo volumes. That is significantly vital within the largest ports the place there isn’t a alternative for bodily growth. Automation permits higher densification at current port terminals, enabling higher cargo throughput and continued cargo progress over time.
ILWU members overwhelming agreed to automation relationship again to 2008. It’s been a contractual proper for PMA members for nearly 15 years. We now have seen by expertise over the previous 18 months that automated terminals have been the simplest at dealing with historic volumes – whereas additionally increasing work alternatives for ILWU members.
… We’ll meet stringent environmental laws to guard the well being of our staff and the communities the place West Coast ports are situated. Automation has been – and can stay – a vital software to lowering emissions and reaching environmental aims accepted by lawmakers within the main ports, significantly the nation’s largest port advanced in Southern California.
Competition Over Automation
Spending so lengthy on the subject of automation is critical. There’s a minimum of one level made in what McKenna stated that the ILWU would take difficulty with: automated terminals increasing work alternatives for the ILWU. The PMA went public with a research supporting this declare. I haven’t studied this research, however the ILWU did refute the declare of elevated ILWU opportunites, calling it a “shell sport.”
The union stated there could be extra jobs on the automated terminals, however they took cargo motion away from the much less automated terminals, that means there weren’t actually extra job alternatives general due to automation.
The ILWU, together with its East Coast counterpart – the ILA, has at all times seen automation as an existential menace. Nonetheless, each unions have made agreements to permit ports to automate in return for substantial compensation. Dockworkers on each coasts are extraordinarily well-paid with wonderful advantages on prime. McKenna didn’t fail to deliver that up in his video:
We’ll proceed to offer world-class wages and advantages to ILWU staff. At present, ILWU members earn practically $195,000 a yr on common — roughly thrice the U.S. median family revenue. ILWU members additionally take pleasure in absolutely employer-paid healthcare, beneficiant pension and retirement-savings plans, and pay ensures.
Regardless of agreements to permit automation and the superb compensation they obtain, the unions have nonetheless fought automation. It’s arduous to see the problem not changing into a sticking level throughout these negotiations. However hopefully, each events will resist using ways like slowdowns, strikes, and lockouts and stay on the negotiating desk till a brand new deal is labored out.