U.S. Labor Secretary Thomas Perez announced Friday night the dockworkers’ union and its employers reached agreement on a new five-year contract.
U.S. Labor Secretary Thomas Perez announced Friday night the International Longshore and Warehouse Union and Pacific Maritime Association have reached an agreement on a new five-year contract.
Perez said container ports up and down the West Coast will resume working “full bore” on Saturday, but added he did not know how long it will take to work off the backlog in container traffic.
“They understand the urgency of the task,” he said.
Monday morning at 7 a.m. there were 35 ships at anchor outside the Port of Los Angeles and the Port of Long Beach because of congestion, 4 more than yesterday, including 27 container vessels, according to the Marine Exchange of Southern California.
The agreement comes after 10 months of negotiations, slowdowns and congestion at West Coast ports that have resulted in dozens of ships sitting at anchor or circling off shore.
Details of the agreement have not been released, but Perez said it will include a new arbitration system. Robert McEllrath, ILWU president and chairman of the union’s negotiating committee, said there will be a panel of arbitrators.
PMA said earlier last week that its last, best and final offer included a yearly $1 dollar per hour salary increase for the next five years. ILWU spokesman Craig Merrilees said there have been some changes since that offer was made, but did not reveal details.
McEllrath said the ILWU negotiating committee unanimously approved the deal, which is a good sign, but emphasized the rank-and-file will have to approve the contract in coming weeks.
“I’m hopeful they will approve it in short order,” said Perez.
Perez said the West Coast labor turmoil had created “a significant headwind to the economy,” which hurt many businesses, including farmers who were already struggling with the drought in California. He also noted the dispute had harmed West Coast ports and that there is “work ahead and fences to be mended.”
“In the shipping business reliability is your currency,” he said. “This dispute undeniably created a crisis of confidence in the West Coast ports. Restoring that confidence in the ports will require a sustained effort by all stakeholders involved. I am confident they are up to the challenge and they understand the tasks ahead.”
The labor secretary said he was directed by President Obama to come to the West Coast to either resolve the issue there or order the two parties to the White House. He praised both McEllrath and PMA President James McKenna, and called Federal Mediator Scot Beckenbaugh an “unsung hero,” who moved the negotiations over the past six weeks from the 20 yard line to the eighth yard line by resolving issues having to do with wages and chassis jurisdiction.
When Perez arrived on Feb. 17 the primary issue dividing the two sides was arbitration. The two sides have since agreed on a “better system” that he said should improve efficiency.
He said the changes will absolutely transform the arbitration system into a “better system” and will “ensure fairness to both sides.”
Perez said he did not know how long it will take to clear the backlog at the West Coast ports, but remained confident the ILWU and its employers will remedy the situation.
Asked if labor laws governing ports should be changed to something similar to those that govern airlines and railroads, he said the current system for ports is effective but sometimes takes time.
Industry groups and ports praised the PMA and ILWU for reaching a contract agreement, but many warned that much work lays ahead to remedy the resulting port congestion.
“It is now time for the parties to quickly ratify the deal and immediately focus on clearing out the crisis-level congestion and backlog at the ports,” National Retail Federation President and Chief Executive Officer Matthew Shay said in a statement.
“The congestion, slowdowns and suspensions over the last few months have had a significant economic impact on the entire supply chain and those who rely on the West Coast ports to move their goods and products around the world and throughout the country. The agricultural, manufacturing, retailing and transportation industries have all suffered due to the nine-month long contract negotiations,” Shay added.
“While this agreement is welcome news, there will be significant backlogs to clear, and everyone has a part to help restore confidence that the West Coast and the United States are open for business,” said Jay Timmons, president and CEO of the National Association of Manufacturers.
Peter Friedmann, executive director of the Agriculture Transportation Coalition, said his group would “continue to push the PMA and the ILWU to improve West Coast port productivity and efficiency, not just restore ports to pre-contract dispute levels, but to levels that will make our ports, and products our AgTC members ship through them, competitive with the best ports in the world. We are a long ways from that.”
He added, “U.S. agriculture has taken a beating these past 10 months, as West Coast port disruption has denied many agriculture exporters access to foreign markets. The delays imposed by congested, understaffed and under-automated ports have created barriers to our exports. Perishables have been knocked out of markets, and our customers overseas have been forced to find other, non-U.S., sources for their meat, fruit, hay, cotton, rice, nuts, french fries, lumber, and so much more.
“We know that the marine terminal operators, longshore workers, truckers, railroads and others will be extremely busy as they work to clear out the massive backlog of cargo at all of the West Coast ports, including Long Beach,” said Jon Slangerup, Port of Long Beach’s CEO. “All of us will be working together to make this happen as soon as possible, but once again, we are extremely pleased with today’s news.”
Chris Lytle, executive director of the Port of Oakland, said with a contract in place, the port’s top priority is immediate resumption of uninterrupted cargo operations. It called on terminal operators, labor, truckers and ocean carriers to join forces and quickly restore productivity.
“Shippers are looking to us to accelerate the flow of cargo,” Lytle said. “We owe them our best effort.”
ILWU, PMA reach contract agreement
