The good news: The International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) have announced they have reached a tentative agreement on healthcare benefits. The parties did not release the details of the bargain and stress it is subject to agreement on other issues still being negotiated. From the onset of negotiations, it was widely accepted healthcare and jurisdiction would be the most contested subjects. It’s progress.
More good news: The ILWU ratified a contract with grain handlers in the Pacific Northwest. This agreement puts to rest two years of discord in the PNW. While the details have not been made public, we do know it covers wage increases and work rule changes. This agreement is not part of the coast-wide ILWU/PMA contract, however, it has been a distraction as the ILWU/PMA negotiations were put on hold while the union dealt with the grain handlers. Let’s hope we can gain traction in the coast-wide contract now that this matter is behind us.
The wildcard: The Port of Portland has given notice to the ILWU that the two disputed reefer jobs (plugging and unplugging refrigerated containers) are going back to the International Brotherhood of Electrical Workers (IBEW) due to continued, conscientious slowdowns by the ILWU. These two jobs have been in debate for two years and have involved the National Labor Relations Board (NLRB), state governors and numerous arbitrations. In January 2014, the port allowed the ILWU to perform the tasks with the understanding productivity would improved, however, nine months later, productivity continues to suffer. The wildcard is whether or not this decision by Portland will negatively affect the coast-wide contract negotiations.
Bloody Thursday is an ILWU holiday commemorating a riot and honoring the deaths of four people on Thursday, July 5, 1934 in San Francisco. It is the only day of the year you will not find a single longshoreman anywhere on the dock.
The strike and subsequent riot marked the birth of the ILWU. For more information about Bloody Thursday, click here.
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.
The driver exodus brought on by months of terminal inefficiencies in conjunction with the January 2014 California Air Resources Board (CARB) drayage truck retirement deadline has resulted in tight truck capacity on the West Coast.
Add to the fray the advancement of shipments into May and June in an effort to get cargo through West Coast ports prior to the anticipated slowdowns brought about by the labor negotiations, and everyone is feeling the pinch.
More containers have to be moved with fewer drivers. It is increasingly imperative to improve the velocity at marine terminals. The system exists in a delicate balance with everyone doing their part. One hitch, and the whole house of cards tumbles.
Vessels need to arrive on time. Longshore labor needs to be available and productive. Containers and chassis need to be available. Terminal operations need to be efficient. Drivers need to be productive and able to turn multiple times.
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.
With the contract between the Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union (ILWU) set to expire on June 30, 2014, cargo owners shipping through US West Coast gateways are getting anxious. The first meeting between the two sides is scheduled to take place soon, and the union will be submitting their wish list. At the top of the list will be jurisdiction, automation and who will pay the tax levied by the Affordable Care Act on their “Cadillac” healthcare plan.
The general consensus among industry insiders is that while the contract will be renegotiated without major incident, the main issues will not be decided upon easily or quickly. A new contract will not likely be completed prior to the expiration of the current contract, and we will see a 90-day contract extension while negotiations continue. We will continue to keep you posted.
Last month’s honoring of both Lincoln’s Birthday and Presidents’ Day got us wondering what the International Longshore & Warehouse Union’s (ILWU) official holiday calendar looked like. Click here for the list of the sixteen holidays honored by the ILWU.