Market Matters Blog

It has been 10 months since more than 22,000 International Longshore and Warehouse Union dockworkers have been without a contract and negotiations have pretty much stalled. The main sticking point is ports continue to push for more automation and the union is concerned automation will eliminate jobs.

The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) released a joint statement nearly one year ago, saying, "Talks are scheduled to continue on a daily basis until an agreement is reached." Both sides also said on May 10, 2022, that they expected cargo to keep moving throughout the process.

On Feb. 23, 2023, the ILWU and PMA announced in a joint statement that, "We continue to negotiate and remain hopeful of reaching a deal soon. The parties have agreed not to discuss negotiations in the media as collective bargaining continues."

Since that statement, talks have stalled, tensions are rising and slowdowns have occurred. Some cargo has been diverted to the East and Gulf Coast ports as shippers worry about another shutdown like the one that took place on Thursday evening, April 6, and Friday morning, April 7, in the ports of Los Angeles and Long Beach.

On April 13, the PMA released a statement saying, "ILWU Local 13, the union's largest local on the West Coast, has continued to disrupt operations at the ports of Los Angeles and Long Beach, the nation's largest port complex. While the union is using new tactics, the result is the same: the disruption of terminal operations.

"Last week, ILWU Local 13 withheld labor that shut down terminals throughout the Ports of Los Angeles and Long Beach. This week, the Union has unilaterally delayed the standard dispatch process, which is jointly administered by PMA and the ILWU, and refused to allow PMA's participation in the labor dispatch process. These actions have slowed the start of operations throughout the Southern California port complex. In addition, the Union has forced crucial cargo handling equipment to be taken out of operation at several key terminals."

There has been talk in the industry since the beginning of 2023 that it is time for the White House to intervene before things get worse. On March 24, a coalition of 238 national, state and local trade associations, including the American Trucking Associations (ATA), wrote to President Joe Biden urging the administration to take a more active role in the West Coast port labor negotiations.

"As we have witnessed, significant cargo flows have shifted away from the West Coast ports because of the uncertainty related to the labor negotiations," the letter said. "While there certainly are other issues impacting the West Coast ports, many cargo interests have expressly stated that they shifted cargo as a result of the negotiations."

ATA President Chris Spear said, "Given the turmoil of the past several years, what our supply chain needs to see right now is continuity. Unfortunately, these ongoing negotiations -- seemingly with no end in sight -- are adding yet another stress factor that is complicating our industry's ability to keep goods moving in a reliable and timely fashion," ATA.

The letter added, "With the lack of progress to date, we would also encourage the administration to offer mediation services to the parties in their negotiations. The only way the parties can reach an agreement that will ensure the continued competitiveness of the ports, and the supply chain stakeholders who rely upon them, is to remain at the table until a new agreement is finalized."

The last time a president stepped in on West Coast labor negotiations was in February 2015 when President Barrack Obama intervened in the nine-month labor dispute that created a slowdown of shipments in the West Coast ports and hundreds of millions of dollars lost.

It is important to note that, when an existing labor contract expires, the "no strike" clause becomes null and void and, the longer talks go on, disruptions are likely to increase as we have been seeing in the Long Beach and Los Angeles ports.

"For the sake of our country, it's time to bring these negotiations to a close," said Spear.

PMA April 13 statement: https://www.pmanet.org/…

Industry letter to President Biden: https://www.trucking.org/…

Mary Kennedy can be reached at Mary.Kennedy@dtn.com

Follow her on Twitter @MaryCKenn

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