West Coast longshoremen are expected to vote in August on a contract extension offer that would guarantee shippers labor peace into 2022, according to a top management official Monday.
Management and labor leaders on both coasts believe a successful contract extension on the West Coast could put pressure on East Coast longshoremen to extend their contract or risk a longer-term loss of market share. The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) have been informally discussing the possibility of a contract extension since 2015.
On the West Coast, leaders of the International Longshore and Warehouse Union (ILWU) this month and next are conducting informational meetings with the rank-and-file membership in the local ports to explain in detail what the Pacific Maritime Association’s (PMA’s) offer means to them.
Last week an ILWU information meeting was held in Southern California, which has the largest membership on the coast. The ILWU declined to comment on its internal meetings.
PMA president James McKenna could only confirm that the meeting in Southern California was in fact held last week. When the process began last month, the general feeling was that the ILWU meetings would take place in June and July, and the vote would likely be held in August, McKenna said.
The PMA and ILWU on May 1 released the details of the offer that would extend the current West Coast waterfront contract, which is scheduled to expire on July 1, 2019, until July 1, 2022. The base ILWU wage would increase from $42.18 an hour at present, in increments, to $46.23 on July 1, 2021. Pension increases over the same period would result in a maximum pension of $95,460 in the final year.
By limiting the contract extension to wages and benefits, employers are attempting to avoid potentially controversial issues such as chassis jurisdiction and automation that could have stretched out negotiations for months, or even risked failure.
Those two issues also have emerged in preliminary discussions in advance of formal bargaining on a new contract on the East and Gulf coasts between the ILA and the USMX, although a top ILA leader said at last month’s JOC Gulf Shipping Conference that he sees no reason why a new contract will not be reached before the current one expires on Sept. 30, 2018.
ILA and USMX leaders discussed the possibility of a new or extended contract stretching until 2025 after USMX chairman Dave Adam suggested a long-term deal at JOC’s 2014 Port Performance Conference. But for various reasons including difficulty in forecasting medical benefit costs, discussions appear to be aimed at a more conventional, shorter-term agreement.
Shipper organizations on several occasions have publicly encouraged the union and management groups on both coasts to engage in talks aimed at contract extensions or early agreements on new contracts. Last week more than 100 organizations representing manufacturers, farmers, agribusinesses, wholesalers, retailers, importers, exporters, distributors, transportation and logistics providers, and other supply-chain stakeholders wrote a joint letter to the presidents of the ILWU and PMA applauding West Coast labor and management for agreeing to participate in contract extension talks and urging a successful outcome.
“Uncertainty and supply chain disruptions have caused great economic harm in the past. We strongly believe that early and continuous dialog can strengthen the US economy and the competitive position of West Coast international gateways,” the organizations stated.
The contentious 2014 to 2015 ILWU-PMA contract negotiations lasted nine months, resulted in damaging ILWU work slowdowns and employer retaliatory moves that caused extreme congestion at West Coast ports, and likely resulted in some permanent loss of market share, similar to equally contentious negotiations that had taken place in 2002. In a presentation last year to the Agriculture Transportation Coalition conference in Long Beach, McKenna speculated that West Coast ports lost possibly 5 percent market share after the 2002 negotiations, and regained only 2 percent.
West Coast ports since 2005 have lost 12 percent market share of Asian imports, to 67 percent according to PIERS, a JOC.com sister company. However, the loss of market share has been due to a variety of factors including construction of a large number of import distribution centers on the East and Gulf coasts and bigger ships calling there after the Panama Canal was enlarged, in addition to shipper responses to West Coast labor disruptions. Also, the Canadian ports of Vancouver and Prince Rupert have attracted cargo from US West Coast ports.
Labor and management sources are not speculating about the outcome of the ILWU membership vote. Longshoremen will vote in their respective districts, the votes will be tabulated and certified, and the results will be announced.
Contact Bill Mongelluzzo at email@example.com and follow him on Twitter: @billmongelluzzo.