SHIPPERS BEWARE: ILWU & PMA Automation Battle Already Beginning

Countdown ‘Til ILWU Slowdowns Contract Negotiations

The countdown is at 9 days.

This isn’t an thrilling countdown like counting down the times ’til Christmas or the seconds ’til the New Yr, or the hours ’til the Tremendous Bowl – which for Detroit Lions followers, like myself, is definitely the NFL Draft, until you depend your quarterback successful the Tremendous Bowl for one more crew. That is the countdown ’til the Pacific Maritime Affiliation (PMA) and the Worldwide Longshore & Warehouse Union (ILWU) begin contract negotiations, which are usually much more disastrous for shippers than the draft has historically been for the Lions.

I’ve been warning shippers for near a 12 months that contract negotiations between the ILWU and PMA are more likely to be contentious over the difficulty of automation. All of us bear in mind when the contentious contract negotiations of 2014-15 resulted in labor slowdowns inflicting such port congestion that items didn’t make it to retailer cabinets for the vacation purchasing season, agricultural exports rotted on the docks, and the U.S. financial system was broken by the billions of {dollars}.

The very last thing we’d like is a repeat of that type of labor strife in spite of everything the provision chain disruption there was for the final two years, however it positive appears to be like doubtless that’s what we’re going to get.

Automation Battle Information

Not surprisingly, I wasn’t pleased to see information articles yesterday in regards to the ILWU and PMA already preventing about automation with a bit greater than every week nonetheless left earlier than negotiations even open. Then once more, anybody who frequently reads this weblog would expect such information tales to floor anytime. And what else ought to anybody anticipate? In any case, the ILWU, together with the Worldwide Longshoremen’s Affiliation (ILA) on the East Coast, have fought in opposition to automation for years, inflicting U.S. ports to fall behind their counterparts around the globe in effectivity, which enormously contributed to the provision chain bottlenecks we’ve been struggling.

Yesterday, the PMA and ILWU went public with the automation combat, because the PMA launched a examine that it says exhibits automation helped enhance ILWU jobs and the ILWU bit again with, Nuh-uh (paraphrased)!

Invoice Mongelluzzo reported within the Journal of Commerce (JOC):

Terminal automation on the ports of Los Angeles and Lengthy Seaside has contributed to a rise in dockworker jobs since 2015 by increasing terminal capability and enhancing cargo velocity, in accordance with a examine launched Monday that was commissioned by West Coast waterfront employers.

…

Nevertheless, ILWU Coast Committeeman Frank Ponce De Leon stated automation has destroyed longshore jobs.

“Container quantity has elevated on the automated terminals, however this has been on the expense of different terminals which have had an offsetting drop in container volumes,” he stated in an announcement to JOC.com. “The elevated productiveness that the PMA is claiming on the two automated terminals has meant much less work at different terminals and an general lack of employment for longshore employees.

Wait a minute, Frank. Are you telling me extra containers undergo the extra productive port terminals with automation than the much less productive ones with out it? That’s a stunning revelation.

Sure, ports and port terminals with extra automation and, subsequently, extra productiveness will appeal to extra cargo than decrease productiveness ports and port terminals the place the unions have succeeded in blocking or slowing automation. Possibly when you didn’t combat technological development and productiveness at different port terminals, they wouldn’t fall so behind and can be aggressive sufficient to not lose cargo quantity to the extra productive terminals.

ILWU Creates Greater Risk to Itself Than Automation

The unions symbolize automation as an existential disaster for jobs on the ports. Nevertheless, automation on the ports typically means a shift within the jobs on the ports slightly than elimination of the roles. And, PMA argues with its examine, automation can truly create extra jobs by growing the quantity and velocity of cargo containers shipped by way of a port terminal. I’m not going to dismiss the potential for bias in PMA’s examine’s findings. There may be ample motivation for them to search out positives in automation for dockworkers forward of contract negotiations when by definition, automation means sure operations are being achieved routinely by machine slightly than by an individual, corresponding to a dockworker. Nevertheless, the a lot larger disaster for jobs on the ports is the ability video games the unions play there.

The ILWU bought mad about not controlling two jobs plugging and unplugging reefer (refrigerated) containers, which had at all times been dealt with by Worldwide Container Terminal Providers Inc (ICTSI) on the Port of Portland, that the ILWU took benefit of its contract lapse in 2014-15 to gradual operations on the port a lot, carriers needed to cease calling at Portland altogether with container ships.

The ILWU had truly already been slowing the import and export of products by way of the Port of Portland earlier than these slowdowns might mix in with the slowdowns at the remainder of the West Coast ports throughout the contentious negotiations, and a choose dominated in June of 2014 they purposely slowed operations there.

Did these slowdowns damage the port? Clearly. Did they damage ocean carriers? Sure. Did they damage shippers? Very a lot so. However right here’s the kicker: it damage ILWU jobs, destroying many. All of the dockworkers who had been a part of loading and unloading container ships on the Port of Portland not had containers ships to load or unload. What number of ILWU jobs had been misplaced as a result of the union determined to play energy video games over two jobs that by no means belonged to the union within the first place?

Frankly, if an employer might discover any technique to by no means work with the ILWU once more after that, it must be out of its thoughts to not pursue that path.

Trigger for Hope

Regardless of all of the doom and gloom emotions the above would possibly trigger in shippers, there may be good cause I can finish this put up on an optimistic word. Negotiations are scheduled to start on Could twelfth. The present contract doesn’t expire till July 1st.

Historically, each the ILWU and ILA refused to begin negotiating new contracts till the earlier one expired. This actually opened to the unions their leverage ways of port slowdowns, strikes, and threats of strikes.

After there was a lot shipper backlash due to the 2014-15 damaging labor strife at West Coast ports, sending container delivery market share to East and Gulf Coast ports, the final set of negotiations for each the ILA and ILWU and their respective employers went uncharacteristically easily.

Like ever-optimistic Lions followers, after Brad Holmes got here into the group and put collectively two handsome draft courses, hope for a successful crew however put together themselves for the SOL (usual Lions), let’s hope we’ve turned a nook for right into a future the place dockworker union contract negotiations aren’t damaging to shippers, and everybody else, however put together for ourselves for the SOS (usual – you already know what the S stands for).