With the West Coast port labor negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) still in a state of uncertainty, the United States Chamber of Commerce penned a letter to President Joe Biden today expressing its concern over the “premeditated and disruptive service actions that are slowing operations at several major ports along the West Coast during the ongoing contract negotiations.”
The ILWU represents port workers in California, Oregon, and Washington, with more than 30% of U.S. incoming container traffic moving through West Coast ports at the Ports of Los Angeles and Long Beach, according to industry estimates. The PMA represents shipping lines and terminal operators at 29 West Coast ports. And the contract, which expired on July 1, 2022, represents more than 22,000 dockworkers at all 30 U.S. West Coast ports.
As previously reported, the PMA said earlier this week that the ILWU has continued to stage concerted and disruptive work actions that have slowed operations at key marine terminals at the Ports of Los Angeles and Long Beach, and elsewhere on the West Coast, including the Ports of Oakland and Seattle.
“Union leaders are implementing many familiar disruption tactics from their job action playbook, including refusing to dispatch workers to marine terminals, slowing operations, and making unfounded health and safety claims.
The ILWU’s coast-wide actions since June 2 are forcing retailers, manufacturers, and other shippers to shift cargo away from the West Coast in favor of ports on the Atlantic and Gulf coast. Much of the diverted cargo may never return to the West Coast…ILWU job actions drive business and jobs away to other parts of the country, and further erode confidence in West Coast ports. Too much is at stake for this harmful disruption to continue.”
The ILWU countered, saying that PMA represents more than 70 multi-national ocean carriers and maritime companies in contract negotiations with the International Longshore and Warehouse Union (ILWU), adding that PMA member carriers and terminal operators made historic profits of $510 billion during the pandemic and in some cases, profits jumped nearly 1000%.
“Even as shipping volumes return to normal in 2023, PMA members have continued to post revenues that far exceed pre-pandemic times by billions of dollars,” said ILWU.
It also made the case that from pre-pandemic levels through 2022, the percentage of ILWU wages and benefits continued to drop compared to PMA rising revenues.
In the letter to the President Biden U.S. Chamber President and CEO Suzanne Clark wrote that it is imperative for the White House to intervene immediately and appoint an independent mediator to help the ILWU and PMA come to terms on an agreement on a new contract.
And she added that the ongoing intermittent labor shutdowns directed by local unions at “key marine terminals” at the ports of Los Angeles, Long Beach, Oakland, and Seattle, among others, “raise concerns that larger disruptions are imminent.”
What’s more, Clark observed that this situation follows a similar pattern in ILWU-PMA negotiations seen over the last two decades, which makes the case for the White House to step in to prevent what she called a larger economic catastrophe.
Making her case, Clark pointed to various labor-related conflicts between ILWU and PMA over the years, including the 2002 breakdown in negotiations, which saw an 11-day shutdown of West Coast ports, which led to then-President George W. Bush to intervene and appoint a federal mediator, followed by the ordering of the Taft-Hartley injunction to re-open the ports. This shutdown cost the U.S. economy an estimated $10 billion.
Fast-forwarding to the present day, she explained that a major work stoppage at the ports of Los Angeles and Long Beach would likely cost the U.S. economy almost $500 million per day, with a more widespread West Coast labor strike costing around $1 billion per day (based on cost estimates made by Bush’s administration in 2002).
“The economic costs of a dispute that results in a port closure would be devastating to consumers and businesses, which are already enduring historically high levels of inflation,” noted Clark. “The easiest way to return to the West Coast port crisis of 2020-2021 is if this situation is not resolved as soon as possible.
And with shippers continuing to divert cargo away from West Coast ports to East and Gulf Coast ports, which started last summer as negotiations began, due to concerns over potential labor disruptions, Clark pointed out that combined imports coming into the ports of Los Angeles and Long Beach in May fell 38% annually, the lowest level since the onset of the pandemic in March 2020.
“The best outcome is an agreement reached voluntarily by the negotiating parties,” wrote Clark. “But we are concerned the current sticking point—an impasse over wages and benefits—will not be resolved. The ILWU is seeking a doubling of wages over the life of the contract and significant increases in pension benefits, while the marine terminals will not agree to a contract that results in permanent cost increases at a time that demand has decreased from its peaks of 2020-2021.”
Earlier this week, National Retail Federation also called for the PMA and ILWU to finally reach a new deal.
“The United States ports, particularly those on the West Coast, play a critical role in the vitality of the American economy,” said NRF Senior Vice President of Government Relations David French. “Thousands of retailers and other businesses depend on smooth and efficient operations at the ports to deliver goods to consumers every day. As we enter the peak shipping season for the holidays, these additional disruptions will force retailers and other important shipping partners to continue to shift cargo away from the West Coast ports until a new labor contract is established. It is imperative that the parties return to the negotiating table. We urge the administration to mediate to ensure the parties quickly finalize a new contract without additional disruptions.”