SAN FRANCISCO (AP) — After over a year of negotiations, the union representing thousands of West Coast dockworkers announced on Wednesday that a tentative agreement has been reached on a new contract. This agreement comes after several work disruptions that impacted shipping traffic at some of the largest ports in the region.
The International Longshore and Warehouse Union (ILWU) negotiated a six-year contract with the Pacific Maritime Association (PMA), which represents cargo carriers and terminal operators, including global shipping leaders like Maersk and Evergreen Marine. The tentative deal, which will require ratification by both the PMA and union members, affects around 22,000 dockworkers across 29 ports from Washington to California. Specific details of the agreement have not been made public.
“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,” stated PMA President James McKenna and ILWU President Willie Adams in a joint announcement. “We are also pleased to turn our full attention back to the operation of the West Coast Ports.”
Impact of the Agreement and Economic Context
The dockworkers have been working without a contract since July 1, and the efficient operation of West Coast ports is crucial, as they handle about 40% of U.S. imports. The importance of reaching an agreement was underscored by President Joe Biden’s involvement last year, when he met with both parties in Los Angeles to help facilitate discussions.
Recent data showed the Port of Los Angeles processed 779,140 twenty-foot equivalent units last month, reflecting a 60% increase since February. Meanwhile, the Port of Long Beach recorded its busiest month in May this year, indicating a continuous rise in shipping volumes, largely due to the influx of goods related to the upcoming holiday season. Port of Long Beach CEO Mario Cordero noted, “At mid-year, we’re starting to see signs that cargo volume is on the upswing, with our busiest month since August of last year.”
Historically, labor disputes at these ports have had severe economic repercussions. A lockout in 2002 and an eight-day strike in 2015 cost the U.S. economy billions and required intervention from the administrations of Presidents George W. Bush and Barack Obama. While this current situation has not led to complete port closures, short-term worker shortages in recent weeks have disrupted operations at some terminals in California and Washington.
Despite a couple of terminal closures around holidays at Los Angeles/Long Beach, analysts like Christian Wetherbee from Citi Investment Research indicated that the disruptions have not significantly impacted operations. However, the situation at the smaller Port of Seattle has been more concerning, with terminal closures and delays reported in recent days.
Following a drastic decline in cargo traffic due to the COVID-19 pandemic in 2020, the industry rebounded sharply. The unprecedented demand during the pandemic led to significant congestion at the Los Angeles and Long Beach ports, which are the busiest in the nation.
The ILWU has advocated for higher wages, asserting that workers deserve a larger share of the record profits garnered by shippers and terminal operators during the pandemic. An ILWU statement emphasized, “ILWU workers risked and lost their lives during the pandemic to ensure grocery store shelves were stocked, PPE was made available, essential medical supplies were reaching our hospitals, and record volumes of consumer goods continued to reach the doorsteps of American consumers.”
President Biden expressed his gratitude to all parties involved in the negotiations on Thursday afternoon, stating, “I want to thank both sides for staying at the table and reaching a deal. Special thanks to the longshore workers who worked historically through this pandemic, and they’re finally going to get the pay and benefits and equality they deserve.”
Acting U.S. Secretary of Labor Julie Su, who played a crucial role in the negotiations, is also expected to benefit from this agreement in her quest for a permanent appointment. Biden highlighted her leadership in keeping discussions ongoing and emphasized the positive impact this deal would have on trade.
The tentative agreement has garnered praise from local leaders, including Los Angeles Mayor Karen Bass, who noted the significance of port work for the city’s economy: “This is a win for the working people of our city.”
Source : https://www.usnews.com/news/business/articles/2023-06-15/west-coast-dockworkers-shippers-reach-tentative-contract-agreement