West Coast Port Workers Ratify Contract Extension

“This first-of-its-kind contract extension is great news for the maritime industry and the nation, setting the stage for reliable and productive cargo operations for years to come,” PMA President James McKenna said in a statement.

Early discussions were advocated by a caucus of 128 beneficial cargo owners (BCO) and logistics providers seeking to avoid a repeat of port disruptions that occurred during the 2014-2015 negotiations.

During the last contract negotiations, slowdowns created extraordinary backlogs and congestion at the ports. Ships were forced to anchor for days offshore to wait their turn at the docks. The West Coast lost a share of its market and revenue as shipping lines diverted cargo to alternative ports on the East and Gulf Coasts. Some of that market share never returned and was exacerbated by the widening of the Panama Canal that allowed larger vessels to make their way to Atlantic ports.

In the first half of 2017, West Coast market share of imports from Asia dropped to 65.6 percent from 67.2 percent the previous year, according to PIERS and IHS Markit.

“You have both recognized the negative economic impact of disruptions and slowdowns that occurred during the last negotiations,” wrote the caucus in a letter to the PMA and ILWU last year. “We believe starting negotiations early will help avoid a repeat of that experience.”

The ILWU ratified the three-year extension with the approval of 67 percent of members.

“The rank-and-file membership has made their decision and expressed a clear choice,” said ILWU International President Robert McEllrath. “During the past year we saw a healthy debate and heard different points of view, with concerns raised by all sides. The democratic process allowed us to make a difficult decision and arrive at the best choice under the circumstances.”

The contract extension was lauded by trade organizations.

“It is an understatement to say that operational stability has been lacking at West Coast terminals during recent longshore labor contract negotiations resulting in significant losses of export and import sales and customers,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition. “Removing one cause of port operational disruption, labor negotiations, is thus highly valued and appreciated by AgTC members.”

“We applaud ILWU members for taking the unprecedented step of approving a contract extension well in advance of the contract expiration,” National Retail Federation Vice President Jonathan Gold said. “This agreement between the ILWU and PMA will provide the stability and predictability that NRF’s members and other supply chain stakeholders need to move their cargo efficiently through our ports.”