• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » What West Coast Ports' Labor Negotiations Mean for Supply Chains

What West Coast Ports' Labor Negotiations Mean for Supply Chains

Port of Oakland
A CMA CGM Group container ship is berthed at the Port of Oakland in Oakland, California. Photo: Port of Oakland.
June 1, 2022
Bloomberg

As the U.S.’s largest ports in California moved record amounts of cargo amid pandemic-induced supply chain bottlenecks, union dockworkers strengthened their indispensable role in the nation’s logistics network.

But the expiration of labor contracts with more than 22,000 West Coast port workers this summer could throw a wrench in the recovery plans of the twin hubs of Los Angeles and Long Beach, which handle about 42% of all U.S. containerized trade with East Asia.

Contract negotiations between the International Longshore and Warehouse Union and about 70 employers represented by the Pacific Maritime Association for new contracts started May 10. The sides have said they’re committed to keeping cargo moving throughout the process. This would avoid a repeat of the delays and congestion that hampered ports from San Diego to Bellingham, Washington during the 2014 talks that extended into 2015.

Here’s a look at what’s at stake:

When does the contract expire?

July 1. Originally set to end in June 2019, the parties in 2017 agreed to extend the end date to June 2022, after roughly two-thirds of union members voted in favor, avoiding cargo disruptions in exchange for higher wages and pensions. In November, port workers declined an offer by employers to lengthen the existing pact for another year.

Who’s involved?

The contracts apply to members of the ILWU’s Coast Longshore Division — marine clerks, foremen and longshore workers employed at 29 West Coast ports. The PMA, meanwhile, counts the biggest container carriers and terminal operators including A.P. Moller-Maersk A/S and Cosco Shipping Holdings Co. among its members.

The White House is on standby in case it needs to reprise its actions in the 2014 talks. Back then, a nine-month dispute that caused disruptions and shipping delays only ended after the Obama administration intervened. It took the shipping industry about the same period after a deal was reached in February 2015 to return to normal service, according to an analysis by Copenhagen-based Sea-Intelligence.

“We don’t need to get involved in this negotiation unless we have to,” Labor Secretary Marty Walsh said on Bloomberg Television May 6. 

Why do these talks matter?

Two years of strong consumer spending have seen record cargo volumes hammer West Coast ports with congestion, leading to an unprecedented supply chain crisis. Although the situation has improved, new economic gridlocks are threatening the recovery. As companies and consumers worldwide feel the repercussions of China’s Covid-19 lockdowns, the domino effect of increased arrivals that had been held back from the U.S. due to the restrictions has yet to peak at West Coast ports, according to the leaders of the ports of Los Angeles and Long Beach. 

“When dockworkers strike, the impacts are felt by everybody,” said Katy Fox-Hodess, an employment-relations lecturer at Sheffield University Management School in the UK and former ILWU organizer.

What’s at stake?

The talks are unfolding at a moment of unusual clout and vigor for the long-declining U.S. labor movement. Unions secured surprising election victories at a Staten Island Amazon.com Inc. warehouse and at dozens of Starbucks Corp. locations, establishing footholds at firms that had successfully resisted organizing for decades. Leaders from both of those campaigns were invited to the White House where they met President Joe Biden, who has pledged to be “the most pro-union president leading the most pro-union administration in American history.”

New union campaigns have also emerged in recent months among staff for Apple Inc., Trader Joe’s Co. and the U.S. Congress. An unusually tight labor market has helped embolden some employees to organize, and has boosted union members’ leverage to demand more at the bargaining table or threaten strikes. 

In the seven years since West Coast port workers have negotiated a full, fresh contract, the hardships of laboring through the Covid-19 pandemic, employers’ recent robust profits, and the rapid acceleration in inflation could all drive up ILWU members’ expectations for winning substantial raises. 

The current focus on mitigating supply chain disruptions and the near impossibility of running the ports smoothly without these workers’ expertise could embolden them to hold out for bigger concessions from management and wield the strike weapon if the companies aren’t cooperative.

“We make no apologies for achieving wages that allow workers to provide for their families,” ILWU International President Willie Adams said in a May 6 statement.

The basic “straight-time” hourly wage for ILWU members is $46.23, according to the latest ILWU-PMA contract. They would therefore make at least $96,000 for a 40-hour week, above California’s median household income of $79,000.

What about automation?

The employers’ right to automate their operations has become a prominent issue in the contract. The 2002 deal introduced new technologies such as scanners and character-recognition technology, while the 2008 pact explicitly authorized automation.

Last year, Total Terminals International LLC announced its intention to fully automate its Long Beach operations, a project the ILWU strongly opposed. This would make it San Pedro Bay’s fourth terminal with some automation out of the port complex’s 14 hubs. 

A week before the 2022 talks started, the PMA released a report extolling the benefits of automation. The study found that two of the twin ports’ automated terminals have processed containers twice as quickly as conventional ones, while paid hours rose by almost one-third. 

ILWU Coast Committeeman Frank Ponce de Leon called the report a “self-serving document,” saying there hadn’t been “an overall increase in productivity at the ports, just a shell game to mask the human cost of job destruction.” 

“Automation itself is a self-fulfilling prophecy — the more automation you use, the better it gets, and the less you need human intervention,” said Stephanie Loomis, vice president of international procurement at freight forwarder CargoTrans Inc. “The union realizes this is their livelihood, and the livelihoods of potentially the next generation. So this is not going to go easy for either side.”

Will they get a deal?

Both sides have repeatedly said they will reach an agreement, and are committed to do so without disruptions. But whether that happens by July 1 is unlikely, as both parties usually agree to extend the contracts to allow themselves extra time to negotiate.  

“It doesn’t matter that the contract isn’t done by July 1, that’s not the litmus test,” PMA President Jim McKenna said in an interview last month. “The litmus test is the contract is done, and there’s been no disruption. I don’t care if it’s done three months after it expires.”

RELATED CONTENT

RELATED VIDEOS

Logistics Global Gateways Transportation & Distribution HR & Labor Management North America
  • Related Articles

    West Coast Ports, Dockworkers Face 2022 Clash Amid Port Snarls

    Never Mind a Possible Strike. Heres the Real Problem at West Coast Ports

Bloomberg

CVS, Rite Aid Ration Contraceptive Pills as Demand Surges

More from this author

Wake up to live
“Supply Chains in Crisis”
updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • coworkers collaborate

    Podcast | Linking Planning and Execution for Real-Time Decision-Making

    Sales & Operations Planning
  • FedEx

    FedEx Faces Big Changes as New Boss Confronts Higher Costs, Angry Contractors

    Last Mile Delivery
  • cyber crime

    The Cyber Blind Spot That Makes Every Supply Chain Vulnerable

    Regulation & Compliance
  • 0627_Guitars.png

    Sweetwater Responds to the ‘New Face of Agility’ in Supply Chain and Merchandising

    Inventory Planning/ Optimization
  • Port of Long Beach

    Supply Issues Account for Half of Surge in U.S. Inflation, Study Says

    Global Supply Chain Management

Digital Edition

Scb may 2022 sm

2022 Supply Chain ESG Guide

VIEW THE LATEST ISSUE

Case Studies

  • 3PL Doubles Productivity With Robots to Fulfill Medical Supply Orders

  • E-Commerce Company Cuts Order Fulfillment Time by 40%

  • Fashion Retailer Halves Fulfillment Time With Omichannel Automation

  • Distributor Scales Business by Integrating Warehouse Automaton Software

  • Fast-Growing Fashion Brand Scales E-Commerce Fulfillment With Whiplash

Visit Our Sponsors

Yang Ming Alithya Barcoding
Blue Yonder BNSF Logistics Generix
GEP GreyOrange Here
Honeywell Intelligrated IFM Inmar
Keelvar Kinaxis Korber
Liberty SBF Locus Robotics Logility
Lucas Systems Nvidia Old Dominion
ORTEC Parsyl QIMA
Redwood Logistics Saddle Creek Logistics Schneider Dedicated
Setlog Holding AG Ship4WD Shipwell
Tecsys TGW Systems Thomson Reuters
Tive Trailer Bridge Vecna Robotics
Verity
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2022 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing