The lack of an official contract opens the door to pressure tactics, but both sides they are not preparing for a strike or lockout.

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In the early hours of this morning Beijing time (the afternoon of July 1, local time in the United States), the labor negotiations for dockworkers in the western United States, which attracted much attention from the global shipping industry, failed to reach any agreement before the expiration of the original contract!

Employers operating West Coast port terminals and unions representing longshore workers have rejected calls to extend the contract, which was due to expire at 5 p.m. local time on July 1.

“Both parties understand the strategic importance of ports to the local and U.S. economies and recognize the need to finalize a new contract covering ports along the West Coast as soon as possible to ensure continued confidence in the West Coast as a competitive trade route.”, The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) said in a joint statement on Friday (July 1) afternoon.

The lack of an official contract opens the door to pressure tactics, but both sides they are not preparing for a strike or lockout.

The existing USL master contract covers 22,000 longshoremen at 29 ports on the US West Coast, accounting for about 44% of US container freight volume. The main container gateways are in Los Angeles and Long Beach, California. of the Twin Ports.

Earlier in the day, more than 150 business groups urged the White House to push management and labor at West Coast ports to temporarily extend contracts to secure supply chains for businesses, workers and consumers as the economy faces growing challenges. Continuity.

Negotiations for a new five-year labor agreement between the International Longshore and Warehouse Union ILWU and West Coast employers began in mid-May amid supply disruptions inland due to COVID, record freight volumes and crowded container terminals. Chain dislocation is reviving distribution challenges, product shortages and growing concerns about a potential recession.

“Extending the current contract will provide additional certainty to all supply chain stakeholders who rely on U.S. West Coast ports. This is even more important because of the We continue to experience supply chain disruptions and congestion for a variety of reasons," the industry associations said in a letter to President Joe Biden. willingness to transport, but labor negotiations failed to reach an agreement as scheduled, and the lack of official contracts still laid huge hidden dangers for the dock unions’ pressure tactics on ports and shipping companies!

Pacific Maritime Association (PMA) and the International Terminals and Warehouses Federation! (ILWU) leaders met with President Joe Biden at the White House on June 10 and pledged to reach a labor agreement without any disruptions to shipments after three of the past four contract negotiations resulted in disruptions, including job layoffs. Many took the comments as a positive sign after the slowdown during the 2014-2015 negotiations, which took about eight months to overcome.

The International Longshore and Warehouse Union (ILWU) essentially has a monopoly because West Coast ports must use its members to handle ocean freight.

On Thursday, dozens of Democratic lawmakers wrote to the PMA and the International Longshore and Warehouse Union (ILWU) stressing the importance of working in good faith to finalize a new contract and ensure the port continues to operate without interruption.

Both sides are under heavy political pressure to reach a solution. Even though a large number of ILWU members make more than $100,000 a year, the union has framed the negotiations as one between mainstream American workers and foreign shipping lines making record profits.

Core hurdle in negotiations: Port automation

The key issues on the table are automation, as well as pay and benefits. Shipping lines and their affiliated terminals see automation as the only way to handle compound annual growth rates of 3 to 4 percent at a time when most ports have run out of physical space for expansion.Unions worry about job losses, but many experts say they will gain jobs in the long term as the number of containers increases, and more jobs will be needed to operate and maintain the technology.

Almost all ports in Northern Europe have automated truck gates and yards, as do many terminals in Asia. The Los Angeles/Long Beach complex has two semi-automated terminals, with another under development. A PMA-sponsored UC Berkeley study showed that automated terminals not only had a 44% productivity advantage over non-automated terminals, but also calculated that dockworkers worked longer hours.

A study funded by an ILWU grant and released Thursday by the Economic Roundtable counters that automation at the Long Beach Container Terminal and the TraPac Terminal in Los Angeles has eliminated 572 full-time jobs and $41.8 million in annual dockworker wages.

The nonprofit urban research group recommended that the cities of Long Beach and Los Angeles impose a worker impact fee on any new automated equipment to offset the public costs of job losses caused by automation. It also said that when longshore workers move containers without automated equipment, California should impose a tax on automated terminal equipment equal to income and payroll tax revenue. The report adds that the San Pedro Bay Port should not approve terminal automation plans unless it can be proven that automation will result in a net benefit to California workers.

A former shipping company executive who participated in the ILWU negotiations but asked not to be named predicted that the PMA would make a huge one-time payment to dockworkers for the rights to permanently automate.

Source: Unitex Shipping

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