A new deal has been reached between West Coast dockworkers at 29 key West Coast ports and port operators after over a year of negotiations, averting potential economic disaster.
- Labor disruptions at ports in California and Washington had implied that negotiations had begun to stall, which caused industries that imported products or goods into the West Coast to worry that the supply chain would potentially become an untenable nightmare.
Worst Case Scenarios Had Looked Possible
As PPAI Media covered last week, the tensions and labor disruptions had reached a point of concern between West Coast port workers and their employers over the negotiations for a new labor contract.
- The U.S. Chamber of Commerce sent an official letter to President Biden urging the White House to appoint an independent mediator.
- Likewise, PPAI joined with the National Retail Federation and 236 state, local and national trade associations in a letter to President Biden encouraging the administration to provide both the ILWU and the PMA any and all support to end the negotiations and reach an agreement quickly to ensure no disruptions in port operations and cargo traffic.
Negotiations between the dockworkers’ union and their employers had been ongoing since May 2022, with some 22,000 workers at 29 West Coast ports technically working without a contract for over 11 months.
- The two sides had reportedly reached an impasse in early June over wages.
This led to work stoppages or slowdowns in a number of ports up and down the West Coast.
- The Port of Oakland completely shut down in early June.
- Terminals in Long Beach remained closed for multiple days.
- All of this led to what was being referred to as “slow and go” conditions at the West Coast ports with more than $5.2 billion of cargo having been stuck in truck and container bottlenecks.
Striking A Deal
The circumstances described above painted a tense relationship between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) that seemed on the verge of tipping into active volatility.
However, last week the two sides released a joint statement together in which a tentative six-year contract for dockworkers was announced.
“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,” PMA President James McKenna and ILWU President Willie Adams said in the joint statement. “We are also pleased to turn our full attention back to the operation of the West Coast Ports.”
Despite the various letters to President Biden, it was acting Labor Secretary Julie Su who reportedly played a “key” role in helping both sides come to an agreement. Su said the deal delivered “important stability for workers, for employers and for our country’s supply chain.”
President Biden used the opportunity to praise the effectiveness of collective bargaining, even when it can lead to “acrimonious” negotiations.
“As I have always said, collective bargaining works,” Biden says. “Above all I congratulate the port workers, who have served heroically through the pandemic and the countless challenges it brought and will finally get the pay, benefits and quality of life they deserve.”
- The six-year is awaiting the technicality of ratification by both sides of the agreement.
- Details and specifics of the contract have not been disclosed at this time.
Promo Perspective
The labor disruptions and slowdowns that already occurred over the first two weeks of June may still have some ripple effects that could affect summer shipping, but ultimately, disaster was avoided and the supply chain should normalize.
An example of the stakes of the contract, alphabroder, a company that does not ship volume through the West Coast, still operates with the understanding that a pivot to the West Coast could be necessary at any point. According to Cheron Coleman, vice president private brand product development & global supply chain at the supplier, who has been keeping a close eye on the labor negotiations, assurance that such a pivot is possible without enormous risk is an important part of operations.
“The West Coast ports contract agreement between the ILU and PMA finally brings peace of mind to the entire import community,” Coleman says. “Being a significant first point of entry into the U.S. market, it’s great to hear that, after more than a year of negotiations and work disruptions, the West Coast ports will soon return to some sort of normalcy.”
