Shipping and Logistics

ILWU/PMA Agree to Begin Contract Negotiations Years Early

Written by Sandy Williams

The International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) will enter contract negotiations an historical two and a half years before the current contract expiration of July 1, 2019.

Earlier this year the PMA proposed beginning contract discussions early to avoid the debacle that occurred on the West Coast during the last negotiation period two years ago. Normally discussions begin about two months before contract expiration.

On August 11, 2016, the ILWU convened a caucus of 100 delegates from 30 West Coast ports to discuss whether it would consider an extension of the 2014-2019 collective bargaining agreement. The delegates, in a majority vote, agreed to enter discussions with the PMA.

“The caucus made a tough decision under current circumstances amid a wide range of concerns and opposing views on how to respond to PMA’s request,” said ILWU International President Robert McEllrath. “This is a directive to go and have discussions with the PMA and report back to the membership, and we’ll do just that, with the wellbeing of the rank and file, our communities, and the nation in mind.”

The ILWU and PMA were urged by beneficial cargo owners (BCOs) and logistics providers to form a new model of negotiation that was based on “early and continuous dialogue.” A caucus of 128 organizations representing manufacturers, farmers, agribusinesses, wholesalers, retailers, importers, exporters, distributors, transportation and logistics providers sent a letter to the ILWU and PMA saying early negotiations would avoid the labor problems and congestion of the last negotiation period.

“You have both recognized the negative economic impact of disruptions and slowdowns that occurred during the last negotiations. We believe starting negotiations early will help avoid a repeat of that experience,” said the letter from the coalition.

During contract discussions in 2014 and 2015 slowdowns and contentious negotiations created extraordinary backlogs and congestion at the ports. Ships were forced to anchor for days offshore to wait their turn at the docks. Shipping lines turned to East Coast ports to deliver their goods causing West Coast ports to lose market share and revenue. Some of that market share never returned.

West Coast ports are faced with new competition from their Eastern counterparts now that the Panama Canal has opened a new lock that gives ships of more than 13,000 TEUs access to East Coast ports. The advantage that the West Coast had in receiving the largest ships from Asia is slipping away and the PMA and ILWU knows it cannot afford further cargo diversions due to negotiation conflicts.

JOC reports that in the past when longshore contract negotiations were imminent on either coast, BCOs began testing alternate routes and establishing relationships with truckers, warehouses and other logistic providers on the opposite coast in preparation to divert cargos if necessary. If the ILWU and PMA can succeed in coming to terms on an extension of the current contract the need for such preparations will be mute, at least for the next several years.

The BCO coalition stressed in their letter that early contract talks should include a pledge by both the PMA and ILWU that there will be no cargo disruptions during the negotiations. Arbitration mechanisms in the new model, said the BCO, should ensure that work slowdowns, strikes and employer lockouts are prevented.

“We fully believe that agreeing early to a contract extension or a new long-term contract will provide the stability and predictability that is needed for global competitiveness that will benefit all stakeholders (labor, terminal operators, cargo owners, etc.) who rely on West Coast ports,” said the BOC coalition.

With the confirmation by the ILWU to begin discussions, the PMA and ILWU will schedule initial meetings in the next 30-60 days.

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