Labor and Management Meet in San Francisco

The International Longshore and Warehouse Union (ILWU) entered contract talks this week with the Pacific Maritime Association (PMA). These labor negotiations come ahead of the July 1 expiration of the current contract and amid backlogs and delays in west coast ports like Los Angeles and Long Beach. Jim McKenna, PMA President and CEO, remains hopeful about the negotiations. “At this point in time,” says McKenna, “you have to be cautiously optimistic that we’re not gonna get into a strike scenario, but it’s early in the game.” Both sides have acknowledged the likelihood of talks continuing past the July 1 deadline, but that outcome does not necessarily mean a strike from the ILWU will take place. 

The biggest focus of negotiations is the right to automate ports. The ILWU stands in firm opposition to automation, something PMA has warmed up to following the pandemic. PMA feels that automation is the only viable solution to prevent future backlogs. The ILWU claims any automation of west coast ports will be the end of thousands of jobs for union workers. 

automation port terminal shipping united states domestic international imports exports

Photo courtesy of Chuttersnap via Unsplash

Labor Negotiations Testing an Already Fragile Supply Chain

The backdrop for these negotiations is, of course, the precarious state of the global supply chain. Shanghai, home to the largest port in the world, has been in a strict Covid-19 lockdown for over a month. Russia’s invasion of Ukraine has destabilized Eastern Europe and is leading to an increase in energy prices worldwide. Meanwhile, the ports of Los Angeles and Long Beach are still working through the backlog faced by Covid restrictions and transportation strikes in the United States.

The dockworkers have been a key part of the record profits for shipping companies during the pandemic. The 22,000 members of ILWU could be looking to flex some of their leverage. Past strikes have been crippling for the domestic supply chain, with 44% of global imports entering the United States from the 29 ports on the west coast.

Port Densification as a Sticking Point in Labor Negotiations

The core of management’s argument is automation is unavoidable. Major ports, like Los Angeles, are in urban centers without room to expand. Automation enables ports to grow up, instead of out. As the global population grows alongside disposable income, imports continue to rise and ports need a place to store containers before they are sent out on trucks and trains. Additionally, studies show the output of automated facilities is 44% higher than that of non-automated facilities.

The ILWU counters these claims by saying the rise in productivity at automated facilities has come at the cost of work in other locations. Based on the east coast, the International Longshoremen’s Association (ILA) support their west coast counterparts. The ILA has successfully limited terminal’s right to automate in their contracts. The U.S. Secretary of Labor, Marty Walsh, is monitoring the negotiations carefully and has stated he is willing to intervene if the supply chain is threatened by any potential outcomes. However, Walsh added he is not personally concerned there will be issues come July.

port shipping freight container ship boat international freight forwarding terminal west coast longshoremen dockworkers union negotiations

Photo courtesy of William William via Unsplash

Common Negotiating Ground on Growth

Both sides remain committed to the negotiating table and believe they will find a solution that works for both parties. The ports are at, and have been at, 100% capacity during the recent past. Terminals need to grow to accept more goods, which means more profit for management and more hours for labor unions. There are versions of a new contract where both sides benefit, it simply is a matter of finding that compromise.

How SiShips Gives You the Advantage

Sheltered International combines expertise with state of the art software to bring you the highest quality domestic and international shipping solutions. With the world constantly changing, SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.