ILWU, PMA likely to reach new West Coast contract in August–September: sources

Courtesy: Journal of Commerce Online – A growing number of sources close to the ongoing West Coast longshore labor negotiations believe that while several difficult issues remain to be resolved, the likelihood is growing that a deal will be reached in August or September with little disruption occurring on the docks.

“The two sides continue to meet and negotiate,” Gene Seroka, executive director of the Port of Los Angeles, told JOC.com Wednesday. “Both have seasoned negotiators at the table, and each understands their importance to the US economy. I am optimistic that we will have a contract in good order and cargo will continue to flow.”

Still, although that sentiment was voiced by a number of sources, it is not unanimous, with some not convinced the process will proceed smoothly from here despite intense pressure on both labor and management from the Biden administration to get a deal done without further slowing container flow through West Coast ports. None are willing to entirely rule out the possibility, however slim some believe it to be, that the talks could go off the rails.

The optimistic sources who spoke to JOC.com were reassured by recent joint statements from the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), including one issued just hours before the existing contract’s expiration on July 1 that appeared designed to ease those concerns.

“While there will be no contract extension, cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached…,” the statement read in part.

Some remain skeptical, given the long history of labor actions and lockouts associated with ILWU-PMA contract negotiations going back to the 1990s.

“Even with the recent joint statement, supply chain stakeholders remain concerned about the potential for disruption, especially without a contract or an extension in place,” more than 150 trade associations wrote in a July 1 letter to President Joe Biden. “Unfortunately, this concern stems from a long history of disruptions during previous negotiations.”

Still, sentiment is growing among sources close to the talks — both those who spoke to JOC.com on background and those speaking publicly — that the potential for large-scale disruption is fading as the two sides proceed deeper into the negotiations.

“While the current contract has expired, both sides stated that they believe that they will have a contract in short order and there will be a contract that will increase the efficiency of the port[s],” Rep. John Garamendi, D-Calif., told the Food and Ag Policy Summit West on Monday, as reported by Agri-Pulse.

Stakeholders are also reassured by ongoing, intensive engagement by Biden administration officials such as Secretary of Labor Marty Walsh and White House Port Envoy Stephen R. Lyons, both of whom are in regular contact with labor and management. The possibility of labor actions that disrupt cargo flow and exacerbate inflation is seen as a key political liability for Biden ahead of the midterm elections in November.

Risks remain

The optimism among stakeholders rests on assumptions that major issues can be overcome at the negotiating table.

Employers appear to be in no mood to concede ground on automation, believing the right to automate that they secured in 2008 and in subsequent contracts — and paid for handsomely since then in compensation to dockworkers — should not be compromised. And employers will also resist efforts to revise overall manning rules — the so-called “manning as needed” doctrine — preferring to leave discussions regarding staffing requirements at automated terminals up to local negotiations between individual terminals and their ILWU locals, as has occurred in the automation projects already implemented at three Southern California terminals.

Those sources also assume local grievances that were the root cause of six months of port disruption in 2014–15 during the last full-fledged ILWU-PMA negotiation will not flare up this time. Such local issues are still outstanding and must be discussed, including dockworkers in the Pacific Northwest believing that employers at Terminal 5 at the Port of Seattle reneged on their commitment in the 2008 contract to support ILWU jurisdiction for maintenance and repair jobs over competing claims by other unions.

Offsetting the remaining risks is the opening many have long seen as the route to a contract despite contentious issues such as automation: historic container line profits in 2021 and this year that could be used to fund generous increases in wages and benefits for dockworkers.

Sources pointed to the recent deal between United Airlines and its pilots represented by the Air Line Pilots Association as an example of how negotiations between employers and economically critical workers could play out on the West Coast. In that negotiation, the largest pilots union last month approved a contract that would elevate the pay of United Airlines pilots by more than 14 percent over the next 18 months, an increase sources considered “generous” by historical standards. There have been no known slowdowns thus far at West Coast ports. And despite the expiration of the prior contract on July 1, under US labor law the union and management are still under a “duty to bargain in good faith” with each other, which means that that neither side can initiate a strike or lockout until an impasse is declared in the negotiations. During the talks, moreover, both sides will be expected to respect the terms and conditions of the recently expired collective bargaining agreement.

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