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Major progress made in negotiations between PMA and ILWU

01 Aug 2022

By Eric Huang       Photo:Martin Damboldt

Some time ago, the negotiations between the Pacific Maritime Association (PMA) which negotiates on behalf of terminal operators and shipping lines and the International Terminals and Warehouse Union (ILWU), which represents dockworkers at 29 ports on the U.S. West Coast, were very noisy. At one time, it was worrying because they could not reach a consensus before the 7/1 deadline. Later, because of the strong intervention of the Biden government, the two sides agreed to maintain a rational negotiation, which eliminated crisis of strike or sabotage from the dock workers this year. Later, the news of the California truck driver's strike due to the AB5 bill shifted the focus of the negotiations between PMA and ILWU, but the negotiations have not progressed, and there are always hidden concerns.

 

But good news came on 7/26, in a joint statement from ILWU and PMA said they had reached a preliminary agreement on healthcare-related matters. They had ever reached an agreement a full month before the 2014 deadline — the last time the parties negotiated a full contract for dockworkers operating at 29 ports in California, Oregon and Washington. At the time, the U.S. faced nine months of supply chain disruption and shipping delays that didn’t end until the Obama government intervened in 2015. Therefore, this time the Biden government has intervened strongly, so that both parties in the negotiation have reached a consensus early on. Even if the negotiation is delayed beyond the 7/1 deadline, it will not affect the operation of the terminal.

 

In a joint statement on 7/26, the two sides said: "Maintaining health benefits is an important aspect of this contract negotiation.” Certainly, rising health care costs have been a general concern for U.S. employers, who continue to struggle to shift costs or share them with employees. However, none of the details in the tentative agreement on maintenance of health benefits (MOB) have been released. In fact, neither side has released any details related to the negotiations beyond the aforementioned joint statement. According to the PMA, employers spent more than $2 million a day on health insurance in the last contract.

 

While health care is a focal point in this round of negotiations, there are other, harder issues that remain to be resolved. With the cost of living and inflation at high levels, unions have said wages and job security will be key issues in negotiations in 2022. The issue of wages has been a major sticking point in current collective bargaining agreements between workers and employers. However, most people agree that the most difficult problem to solve is the use of automation in ports. After some previous concessions to automation, there are rumors that unions want to delay the process of automation or even reduce the level of automation, but employers are eager to introduce new technology into port operations to reduce the reliance on human labor. In addition to automation issues, training, and jurisdiction (which refers to what kind of work unions can perform in ports) are also at the center of the debate.

 

Meanwhile, California's third-largest port of Oakland resumed full operations over the weekend after a strike by California's independent truckers was moved to a "free speech zone" away from the terminal gates. Protesters blocked the port for five days last week. The lockdown has affected the movement of goods including medical supplies, agricultural products and industrial parts, and ports are expected to take weeks to digest the backlog. Besides, the Biden government also set up an emergency committee on July 15 to resolve the rift between 115,000 unionized railroad workers and the largest U.S. railroad company to avoid a possible strike.

 

Uncertainty surrounding union negotiations at USWC has led to more ships shifting ports of call to eastern U.S. and Gulf Coast ports such as New York, Savannah, and Houston, where cargo volumes have soared to new records. On behalf of importers, shippers, manufacturers, and other trade organizations affected by port operations, an open letter has also been issued calling on both parties to negotiate in good faith and maintain rational negotiation until new contracts are reached, and not to allow already precarious supply chains to suffer greater damage and impact.

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