The contract between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) governing West Coast dockworkers was approved by both parties last month. But, that does not mean operations are back to normal, whatever normal is these days.
Remember when terminal operators and ocean carriers reference “returning to normal,” they are talking about vessel operations, which are normalizing, but not normal. The rest of us are talking about yard and gate operations, which remain stubbornly choked.
But, then, how is it supposed to return to normal when there are days that less than 10% of the registered longshoremen make themselves available to work? The retroactive compensation and wage increases are not expected to improve the availability. Quite the contrary, they are expected to lessen the availability.
There is not much to report on this subject. By all reports, negotiations are proceeding amicably and, despite working without a contract, there have been no related disruptions at West Coast marine terminals. Certainly a welcomed development!
Over the past month, negotiations have been on hiatus three times. Last week’s break was to allow the union to caucus. Caucus affords union leadership the opportunity to present to rank-and-file members the status of negotiations thus far and to test their support or opposition to the offers on the table. The two other breaks, including the one currently in effect until Monday, August 4, are to enable the ILWU to continue unrelated negotiations in the Pacific Northwest to address an ongoing dispute between the grain handlers and the ILWU.
The contract governing dockworkers on the US West Coast expired today without a new contract in place. It was widely predicted the contract between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) would not be concluded before the expiration of the previous contract. So, we are not surprised by this development.
Both sides have been very quiet on the progress of negotiations. There has been no battle in the press. There has been no public banter at all. We take that as a positive sign. If negotiations were going poorly, we would be hearing saber rattling for sure.
While we have not seen a walk off during the negotiations thus far, we are seeing a shortage of labor. As the regular longshore workers go on vacation, typical in June, there are not enough casuals to fill the open slots. Such shortages create queues, congestion, long turn times and hamper productivity.
In the May edition of our newsletter, we covered the two most significant negotiation topics, jurisdiction over waterfront jobs and the pending tax on the union’s “Cadillac” healthcare plan. Click here for a refresher.
Negotiations have begun in the contract renewal governing longshore labor on the US West Coast. The contract parties are the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). By all accounts the negotiations had a positive start. That being said, a new contract is not expected prior to the current contract’s expiration of June 30, 2014.
Last month, we covered the two most significant negotiation topics, jurisdiction over waterfront jobs and the pending tax on the union’s “Cadillac” healthcare plan. If you need a refresher, click here.
Additionally, the Journal of Commerce prepared an excellent FAQ on the subject. Please read it here.
Meanwhile, cargo advancements and diversions are occurring as both importers and exporters are trying to stave off as much upheaval to their supply chains as possible during the negotiations and expected slowdowns and disruptions.
On the 12th of this month, the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) will begin negotiations on the labor contract encompassing US West Coast port operations. The current contract is set to expire on June 30, 2014.
Bill Mongelluzzo, Senior Editor, Journal of Commerce spoke at a WIL/PMSA luncheon last week and surmised the contract will not be agreed upon by the end of the current contract. Once the contract expires, ILWU members are not held to the same anti-strike clauses and, therefore, have more leverage in negotiations. While a strike is not expected, we will likely see slowdowns and temporary work stoppages up and down the West Coast as is typical during negotiations.
The biggest points of contention in this year’s negotiations will be jurisdiction and the tax on the ILWU’s “Cadillac” healthcare plan. As we have seen in Portland and Oakland, the ILWU is very concerned about the work performed by other unions on the docks. While the IAM, IBEW and others have performed work at marine terminals since the 1930’s, the ILWU is looking to solidify their position. While automation may be taking an ever-increasing role, mechanic positions are going to be needed to maintain and repair even automated equipment.
As it relates to the ILWU healthcare plan, the Affordable Care Act (aka Obamacare) allows “Cadillac” plans to be taxed beginning in 2018. The ILWU’s healthcare plan is considered “Cadillac” as members pay no premiums and the only co-pay they encounter is $1 for prescriptions. Because of the value of their plan, the tax adds up to a whopping $150,000,000-$160,000,000. That’s not a typo. It is 150-160 million dollars. The PMA is willing to talk about sharing the cost, but the ILWU is not receptive to that concept. Because of the growing discontent with Obamacare and the effective date of the tax being four years out, by negotiating a three-year contract term versus a six-year term, it is possible the two parties can table the discussion until such a time this portion of the law is revisited and the point moot.