West Coast Port Labor Deal Struck
Federal intervention helped produce a new labor deal for West Coast dockworkers.
The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) announced a tentative agreement late Wednesday on a new six-year contract covering workers at all 29 West Coast ports, ending a grueling 13-month labor battle.
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Acting U.S. Secretary of Labor Julie Su was instrumental in facilitating the unofficial deal, which the PMA and ILWU still have to ratify. They’re not sharing any details about the agreement at this time.
“We are pleased to have reached an agreement that recognizes the heroic efforts and personal sacrifices of the ILWU workforce in keeping our ports operating,” said PMA president James McKenna and ILWU president Willie Adams in a joint statement. “We are also pleased to turn our full attention back to the operation of the West Coast Ports.”
On Thursday, the Port of Oakland commended Su for “her key role in the negotiations.”
“Today is a monumental day for U.S. West Coast seaports. Labor peace is a commitment to continue delivering the most efficient, cost effective, and environmentally sustainable cargo operations in the country. Asia to the West Coast still remains the most efficient route,” said Port of Oakland executive director Danny Wan. “We thank Acting Secretary Labor Secretary Julie Su her key role in the negotiations.”
The Retail Industry Leaders Association hailed news of the port labor deal as a win for “every industry.”
“It’s encouraging to hear that a tentative agreement has been reached between negotiating parties on the West Coast, not just for retailers, but for every industry that relies on this global commerce gateway,” the Washington, D.C.-based trade group said in a statement issued Thursday.
RILA added that the labor deal offers retailers greater “certainty” for their supply chains while curbing the risk of “more inflationary pressure” affecting the American economy.
“We appreciate the Biden administration and Acting Labor Secretary Su for her engagement, and we encourage a swift ratification and adoption of the agreement to ensure there are no further labor stoppages that impact retailers’ ability to deliver for consumers,” it said.
On Monday, Su traveled to San Francisco to help broker a deal between the ILWU, which represents the 22,000 dockworkers at the ports, and the PMA, whose membership includes the ports’ terminals and ocean carriers. Su held joint meetings through Tuesday.
White House press secretary Karine Jean-Pierre alluded to progress being made after the meetings Tuesday, saying “we know that the parties in the negotiation have overcome some sticky points already and are continuing to address the most difficult issues right now.”
With retail’s peak shipping season beginning in July, the industry has keeping a close eye on the potential for more disruption, with many already having shifted some cargo volume to the East and Gulf Coasts. Supply chain visibility platform FourKites indicated that just 27 percent of import shipments it tracked in June went through the West Coast ports, compared to 73 on the East Coast.
That compares with 40 percent of import shipments moving through the West Coast ports as of February, and as much as 46 percent as of September 2021, FourKites said.
The new contract comes after dockworkers were entrenched in often-tenuous negotiations over wages, benefits and concerns about the use of automation, with both parties even entering a media blackout. The prior contract had expired July 1, 2022.
The first week of June brought stoppages across terminals as workers no-showed for shifts at California ports in Los Angeles, Long Beach, Oakland and Hueneme, as well as the Washington hubs of Seattle and Tacoma.
At the time, the PMA blamed the ILWU for the shutdowns, saying the union declined to dispatch “lashers” who secure cargo for trans-Pacific voyages.
Su’s intervention appears to have helped seal the deal, with the Retail Industry Leaders Association (RILA) and Port of Los Angeles executive director Gene Seroka lauding her efforts.
“It’s clear that this is a top priority for the Biden-Harris administration,” said Seroka, referring to Su’s visit. “The bottom line for us is it’s been 13 months. We need both sides to bargain in good faith and find a way to reach agreement quickly.”
During a news briefing on Tuesday, Seroka said the L.A. gateway had “largely been able to function close to normal” since June 1, but admitted that both San Pedro Bay ports were running at approximately 70 percent of working capacity.
Seroka noted “minimal disruption” in the six days prior, after what he called a week of “sporadic delays” and lingering spot shortages on the port’s docks.
Seroka said that the completed labor contract negotiations, along with a healthy U.S. economy, will encourage strong port performance this year.
“I remain optimistic, with the Port of Los Angeles being a leading economic indicator, that the increase in trans-Pacific vessels tells me seasonal product flow is picking up,” Seroka said. “Think back-to-school items, fall fashion and the year-end holiday merchandise that are all now beginning to come our way.”
With a tentative agreement in place, the focus now goes north of the border, where more than 7,000 workers represented by ILWU Canada have overwhelmingly voted in favor of supporting a strike. The workers couldn’t strike before June 24, but stoppages would impact Canadian West Coast ports including its two biggest gateways—the Port of Vancouver and the Port of Prince Rupert.
Additional reporting by Jessica Binns.