Negotiations on the West Coast port labor contract dragged on for months longer than expected, with tempers flaring along the way. Work disruptions began affecting ship schedules and container dwell times over the past two weeks. It now appears that more that significant fallout to the supply chain has been averted: A deal has been reached.
Late Wednesday night, the Pacific Maritime Association (PMA), representing the terminals, and the International Longshore and Warehouse Union (ILWU), representing workers, announced a tentative agreement on a new six-year contract.
No details were released and the agreement is still subject to ratification by both parties.
Acting Labor Secretary Julie Su had flown to San Francisco to meet with the parties on Monday and “played a key role” in the reaching the agreement, according to the ILWU and PMA.
PMA President James McKenna said the new contract agreement “recognizes the heroic efforts and personal sacrifices of the ILWU workforce in keeping our ports operating [during the pandemic and supply chain crisis].”
ILWU President Willie Adams said the union will now “turn our full attention back to the operation of the West Coast ports.”
Deal averts peak season disruptions
Reaching an agreement prior to peak season was crucial for all parties. Doing so avoided political fallout to the Biden administration from pre-holiday congestion headlines. The ILWU avoided reputational fallout from holding up Christmas cargoes to increase wages that were already relatively high. And the PMA averted losses to port productivity during peak season, which translates into more terminal profits.
Volumes to the West Coast have been seasonally rising, in line with pre-pandemic patterns. The Port of Los Angeles handled 409,150 twenty-foot equivalent units of imports in May, up 19% from April and up 64% from the recent low in March.
As of Monday, there were 58 container ships en route to the ports of Los Angeles and Long Beach from Asia, compared to 46 a month before and 47 two months prior.
Port of Los Angeles Executive Gene Seroka said his port is operating at about 70% of capacity. Of the 30% shortfall, he said half was due to macroeconomic issues and half was due to cargo switched to East Coast and Gulf Coast ports as a result of labor concerns at West Coast ports.
“If we can get a labor deal soon and the economy doesn’t falter, we’ll have a strong second half,” Seroka said on Tuesday.
They got the labor deal. Now it’s up to the economy.
Click for more articles by Greg Miller
Related articles:
- Confusion reigns as labor dispute ‘fog’ blankets West Coast ports
- Labor unrest, canal woes could complicate ‘normal’ peak season
- West Coast dockworkers making $200K demand higher pay
- West Coast container ports hit as labor talks take ominous turn
- Trans-Pacific spot container shipping rates are inching up
- Container shipping under pressure as peak season hopes dim
- Shipping boom hangover: When measuring markets gets tricky
- US imports up again in April as market mirrors pre-COVID ‘normal’
- Port of LA boss: Good Friday work stoppage was ‘a call to action’
- LA-LB outlook darkens as labor unrest briefly shutters ports
- West Coast wipeout: Los Angeles, Long Beach imports still sinking
Brokerage Compliance Symposium
The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry.
F3 Awards Dinner
The night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room.
F3: Future of Freight Festival
Industry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals.
The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowThe night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowIndustry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now