Fleet Management

Agreement Reached Over West Coast Port Labor Problems

February 23, 2015

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Port of Los Angeles. Photo: Port of L.A.
Port of Los Angeles. Photo: Port of L.A.

The Pacific Maritime Association and the International Longshore and Warehouse Union on Friday evening announced a tentative agreement on a new five-year contract covering 13,000 workers at all 29 West Coast ports.

The deal was reached with assistance from U.S. Secretary of Labor Tom Perez, who met with both sides last week. Also assisting was Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh, who stepped in last month.

Negotiators have not released details of the agreement, which is subject to ratification by both parties. It is expected to take several weeks to get the needed approvals.

“After more than nine months of negotiations, we are pleased to have reached an agreement that is good for workers and for the industry,” said PMA President James McKenna and ILWU President Bob McEllrath in a joint statement.

Eric Starks, president of transportation research firm FTR, says "the importance of the ports on the U.S. West Coast can hardly be overstated. In Q3 2014 (latest available data) these ports were responsible for over 52% of the nation’s containerized imports and over 38% of the containerized exports. These figures represent about 2.7 million import TEUs and 1.2 million export TEU’s respectively."

The National Retail Federation said the extended contract negotiations have had a significant effect. "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 NRF said in a statement. "The agricultural, manufacturing, retailing and transportation industries have all suffered due to the nine-month long contract negotiations.”

Even if the agreement is approved by both sides, analysts say it will take months for West Coast Ports to get through a backlog of freight that is stacked up at the facilities and on ships that have been anchored in harbors waiting to unload.

In addition, Starks notes, "There are deep-seated problems in the ports revolving around the peaking problems associated with the new mega-ships, chassis supply and the turmoil associated with the new shipping alliances."

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