Labor Talks to Start in 2022 at Congested West Coast Ports

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Seaport Terminals will negotiate a new contract with 22,400 dockworkers that has proved controversial and disruptive over the years

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Private companies operating port facilities from Washington state to Southern California are due to begin negotiations next year on a multi-year agreement with a consortium representing 22,400 dockworkers to replace the contract expiring in July 2022, allowing The potential for new turmoil on bargaining has increased. The past years have been highly controversial.

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Negotiations with the International Longshore and Warehouse Union, which take place approximately every six years, led to severe labor disruptions and shipping delays during the last cycle in 2014 and 2015. This time around, the discussions are expected to start early next year. The worst port congestion in memory, a pandemic-induced import surge, has overwhelmed container terminals and triggered a record backlog of container ships from the ports of Los Angeles and Long Beach.

“I don’t see the end, especially with the ILWU contract negotiations next year,” said Kearney’s managing partner, Karin Blank. major retailer.

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The union this month rejected a proposal by port terminal operators to delay talks until 2023. Employers wanted to extend the existing contract because of fears over potential disruptions during negotiations that could worsen ongoing supply-chain disruptions.

ILWU international president Willie Adams said in a statement Tuesday that everyone should welcome the prospect of collective bargaining “fundamental to the well-being of our ports rather than predicting a disaster.”

During earlier negotiations, importers brought in goods quickly and diverted cargo to Gulf and East Coast ports to reduce potential supply-chain holdups. Their options are more limited this year as shipments are already critically supported in ports and inland supply chains.

The constant rush leaves the wrecked ships. They can increase vessel backup if they move cargo quickly or shift to alternate gateways. “If they wait and see if there’s a disruption, then what?” Jonathan Gold, vice president of supply chain at the National Retail Federation. “They don’t want to be caught flat-footed.”

The ILWU contract includes approximately 15,400 full-time and 7,000 part-time dockworks at ports stretching from Bellingham, Wash. to San Diego. Most workers are not directly employed by terminals. The facilities order the union’s employees to shift day or night depending on the need.

Negotiations, which involve 70 employers at 29 ports, often last for months. Disagreements in previous negotiations resulted in shipping congestion. Employers have accused workers of slowdown, while workers have claimed that employers were mismanaging operations.

During negotiations that began in 2014 and dragged on into 2015, dozens of ships backed Southern California, causing delays that caused increased costs to individual retailers and millions of dollars in lost sales. In 2002, President George W. Before Bush enacted the Taft-Hartley Act covering oversight of union activities to open ports, employers at one point laid off workers for 10 days.

Mr Adams of ILWU, during an interview on a federally-focused podcast called “The Docker” in August 2020, asked Dockerworkers to save money ahead of upcoming talks. “There could be a fight in 2022,” he said. “be ready.”

In a recent statement to Businesshala, Mr Adams said the union is focused on moving goods as quickly as possible and protecting workers’ safety.

This year’s talks come as the maritime carrier, which operates many of the West Coast’s port terminals, posted record profits. Denmark-based AP Möller-Maersk A/S, the shipping giant whose APM terminal unit is one of the largest container facilities in the Port of Los Angeles, reported a $5.44 billion profit in the most recent quarter, which was nearly half its net result. is doubled. Full of 2020.

Jim McKenna, chief executive of the Pacific Maritime Association, which represents terminal operators in labor negotiations, said he expected talks to begin in early spring, before the contract expires in July. He said the federal government usually doesn’t focus on negotiations unless the risk of disruption increases after the contract expires.

The basis for the talks comes with the White House already facing mounting pressure over supply-chain disturbances that are delaying deliveries of retail and industrial goods and economists partly to accelerate inflation. are guilty.

“The pressure will come back on the parties to make sure that we do everything humanly possible to make sure nothing affects the fragile supply chain,” Mr McKenna said.

Automation and leverage are usually key issues during negotiations, McKenna said. The terminals received the right to expand the use of the technology in previous contracts, while the union achieved an increase in wage and pension benefits.

The average dockworker with more than five years of full-time experience earned about $190,000 in 2019. Many observers made $500,000 or more that year. According to PMA data, benefit costs for most full-time dockworkers increased from $82,500 to about $110,000 per employee during the decade through 2019.

Questions over how automation is rolled out could heat up in the coming year as terminal operators look for ways to accelerate the flow of containers. The Los Angeles and Long Beach ports have been flooded with imported boxes, and terminals handling imports have been hampered at times during the pandemic when the COVID-19 outbreak in the region cut the labor force.

Right now, only two of the Southern California Gateway Complex’s 13 terminals use robotics at large, Trapac LLC’s Los Angeles Terminals and Long Beach Container Terminals LLC.

Union officials oppose the expanded use of automation, saying it is costly to install, disable and kill jobs. Mr McKenna said he expected the issue to be “front and center” of negotiations, particularly in Los Angeles and Long Beach where 86 container ships were waiting offshore for berth space on 16 November.

Neighboring ports, which have little room for expansion, account for about 40% of the country’s sea container imports. “Automation allows you to double your capacity in a footprint,” said Mr. McKenna.

David Kerendian, who owns Tower Textile Inc., a small Los Angeles-based importer, says he’s stuck if labor talks turn ugly because he can’t ship through alternative ports. “If slowness comes, forget it,” he said. “This remainder will continue through 2022.”

[email protected] . on Paul Berger

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