We remember all too well the pains of the west coast labor negotiations in 2014/2015. It took nearly a year to finalize the contract and the US Labor Secretary’s involvement to close the deal. The aftermath and clean up took months to clean up.
The current contact is set to expire on June 30, 2019. The PMA sent a letter to the ILWU requesting early negotiations, and the labor union sought approval from its rank-and-file. The matter was voted on by ILWU delegates last month, and the majority elected to enter into early contract negotiations.
It is a hopeful sign. The industry was set to have simultaneous negotiations with both the east/gulf coast contract and the west coast contract expiring in close proximity. A nationwide disruption would be devastating to the county Not to mention the industry cannot handle further disruption to cargo flows on the west coast alone.
The Pacific Maritime Association (PMA) issued the above statement today regarding the status of their contract negotiations with International Longshore & Warehouse Union (ILWU).
As we know and have been suffering through, the contract expired July 1, 2014. Negotiations began in May 2014 but have not been going well. The two sides agreed to federal mediation on January 5, 2015. The high hopes for the mediator being able to bring both sides to an expeditious agreement were soon dash when the both the PMA and ILWU began to issue competing press releases.
Meanwhile, terminal operations continue to suffer, vessels are delayed and skipping ports of call and cargo owners are actively pursuing alternative gateways.
To watch the video click here.
The unresolved contract between the ILWU and PMA has resulted in not only damage to the psyche of the West Coast shipper but also to the businesses and products shipped.
Even before the labor negotiations soured, shippers had grown weary of the congestion on the West Coast. With the increasing delays and inability to get their products to market, whether import or export, they are exploring alternative gateways. Houston has been bantered about quite a bit lately.
This news is not good for California. Once cargo is diverted, it may never come back. Worse yet, export commodities are sitting at processing facilities, in warehouses or in containers up and down the state. Each one of these shipments represents a sale to an overseas buyer. If the buyer is unable to get their hands on the cargo, or it arrives in a damaged state due to idling and longer transit times, they will seek out alternative suppliers in other parts of the world…we are not the only ones who grow things, after all. Once a customer finds a different supplier, they may never come back to their California grower.
Reliability is woefully missing and desperately needed.
The contract negotiations between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) are not going well. On November 20th, the ILWU put the negotiations on hiatus until December 2nd and rejected the PMA’s request for a contract extension. These actions caused a wave of anxiety for West Coast shippers… and motor carriers!
The two sides have also begun sparring in the press.
Here are two PMA press releases Nov 13 and Nov 20.
Here are two ILWU press releases Nov 3 and Nov 10.
Industry groups have written to the president and met with administration officials in hopes of bringing in a federal mediator to assist with the stalled negotiations. The president’s response, “Just last year, there was a long negotiation at the East and Gulf Coast ports,” Frank Benenati, a White House spokesman, said in an e-mail [to Bloomberg News] today [November 18]. “And just as the two sides in that case were able to resolve their differences through the time-tested process of collective bargaining, we’re confident that management and labor at the West Coast ports can do the same.”
Confidence in the bargain process…really?!?!?! This is an incredibly unhelpful and uninformed statement. When the ILA and USMX negotiated their contract covering East and Gulf Coast ports last year, the sides did indeed request the assistance of a federal mediator. The mediator’s involvement was pivotal in reaching an agreement.
In lieu of assistance and progress, we are confident the work slowdowns, work stoppages and labor shortages will continue.