West Coast dockworkers to keep working, and talking, as contract expires
The union representing about 22,000 West Coast dockworkers and their employers will continue negotiations for a new labor contract past Friday’s expiration of their current pact and said the ports — among them the U.S.’ busiest — will keep functioning.
“While there will be no contract extension, cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached between the Pacific Maritime Association and the International Longshore and Warehouse Union,” the parties said in a joint statement Friday.
The ILWU and the more than 70 employers represented by the PMA started talks May 10 to work out a new contract for longshore workers across 29 ports in California, Oregon and Washington. Although the current agreement ends Friday at 5 p.m., the groups had recently said they were unlikely to reach a deal before then and had reaffirmed neither party was preparing for a strike or lockout. Talks often go past the expiration.
“Both sides understand the strategic importance of the ports to the local, regional and US economies, and are mindful of the need to finalize a new coast-wide contract as soon as possible to ensure continuing confidence in the West Coast,” the ILWU and PMA said.
Port of Long Beach Executive Director Mario Cordero said the sides are showing they remain committed to keeping goods passing through the ports, and he projected that a deal over a new contract will be reached “soon.”
“I’m extremely confident that there will be a mutual resolution here within a reasonable time,” Cordero said in an interview with Bloomberg TV. “I can guarantee you the cargo is going to keep moving.”
The ports handle just under half of the containers entering and leaving the U.S. and are the principal gateway for shipments to and from China, the biggest source of American merchandise imports — illustrating the high-stakes nature of the negotiations.
Last November, the ILWU declined an offer by the PMA to extend the current contract until July 2023. The current pact was originally set to end in 2019 but was lengthened after roughly two-thirds of union members voted to do so in exchange for higher wages and pensions.
This time, the negotiations are drawing attention because the nation’s largest trade hubs — the ports of Los Angeles and Long Beach — are struggling to clear pandemic-era congestion.
The economic stakes are high: July and August are typically busy months for imports from Asia as retailers stock up on back-to-school and holiday goods. The peak has arrived even earlier this year, with companies looking to preempt disruptions by ordering these products even further ahead.
Additional transportation snarls would only add to inflationary pressures that have helped pull down President Biden’s approval ratings.
The ILWU, the union representing dockworkers across the West Coast, is at the bargaining table with the PMA, the group representing shipping companies. The current contract expires on July 1.
They will also test how far a major union will apply its bargaining leverage during an economic slowdown, given the country is facing a moment of unusual clout for its long-declining labor movement.
Los Angeles and Long Beach had already been struggling to clear two years of pandemic-era congestion and are continuously dealing with landside issues such as clogged warehouses and railroads and unused truck gates.
The White House had been closely watching the talks, and Biden met with the parties in Los Angeles in June.
If the president and his team fail to successfully mediate the negotiations, he could be forced to enact the Taft-Hartley Act, a Cold War-era law that allows the government to call for an 80-day cool-down period amid labor impasses.
Then-President George W. Bush relied on the legislation to reopen ports in 2002 after the PMA locked out workers for 10 days after a series of work slowdowns, the last time it was invoked.
Earlier Friday, a coalition of 150 trade groups led by the National Retail Federation said the White House should work with the parties to extend the current contract until a final deal is reached, ensure commitments to remain at the negotiating table and not engage in any kind of activity that leads to further disruption at the ports.
As these hubs enter peak shipping season, resulting in stress on the supply chain and increased inflation, “supply chain stakeholders remain concerned about the potential for disruption, especially without a contract or an extension in place.”
Bloomberg writers Katie Greifeld, Caroline Hyde and Sonali Basak contributed to this report.