The current contract between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) is set to expire on July 1, 2022. The contract represents 22,000 workers and employers, creating an environment of tense anticipation.
As in previous years, negotiations for renewing the labor contract are experiencing delays, with ILWU having requested a pause in talks between May 20 and June 1.
Contract Talks
In May, ILWU began labor contract negotiations with the Pacific Maritime Association (PMA). The negotiations have addressed worker safety, benefits, wages, and operational processes. Additionally, terminal automation is a hot topic, as PMA reasons that it is the ideal solution for increasing long-term port efficiency. However, ILWU claims that automation threatens port workers’ job security as well as the security of hackable digital systems.
Beginning negotiations was a long-anticipated moment for the many parties that ILWU and PMA represent, as contract disagreements can cause significant supply chain disruptions. ILWU and PMA represent dozens of companies and their workers in West Coast ports, totaling 75% of the union members working at Long Beach and Los Angeles ports. The two negotiating parties have been working to keep cargo moving while talks continue, with both emphasizing an optimistic tone for reaching an agreement without causing any disruptions to the supply chain processes.
Suspended Until June 1
The talks continued daily until May 20th, at which time ILWU requested a pause in negotiations until June 1st. The ILWU did not specify the exact reasons for the break and has avoided responding to any requests for comments. Although the contract negotiations paused, individual committee meetings continued throughout May.
As talks resumed on June 1st, so did the typical media blackout preventing significant updates. ILWU and PMA had the month of June to complete the negotiation before the current contract’s expiration on July 1. However, even with ongoing negotiations, it could take months to reach a final agreement.
This possibility is demonstrated by the previous negotiation process that took place between ILWU and PMA upon the contract expiration in 2014. Negotiations continued for nine months at that time, finally ending in February of 2015. The delayed process created huge cargo backlogs, disrupting logistics across the entire country.
What to Expect in the Months to Come
Delays in this year’s contract renewal are likely to have a similar effect. Cargo pileups, delays and even inflation are some of the potential consequences that could stem from dragging out the negotiations. Although contract renewals have caused partial shutdowns in the last three decades, a full shutdown has not happened since 1971. If all West Coast ports were to fully shut down, it would have catastrophic effects on the global supply chain.
For now, ILWU and PMA remain optimistic about continuing negotiations without major adverse effects. The West Coast port chief, Mario Cordero, has expressed that talks will almost certainly not conclude before the contract expiration. However, he added that the ports will still work to maintain cargo movement and prepare for the peak shipping season around the corner.
Regardless of the outcomes of the discussions or the supply chain disruptions that may occur as we wait for the negotiations to finish, ClearFreight will remain ready to help you navigate the global supply chains turbulent waters. With our decades of experience and specialized supply chain solutions, ClearFreight can help make logistics easier for you, contact us today to learn more.