Roughly six weeks after the International Warehouse & Longshore Union and the Pacific Maritime Association (PMA) reached a tentative five-year labor agreement, following nine months of often acrimonious negotiations that led to myriad supply chain and logistics disruptions, the ILWU said late last week that steps are being taken to make the tentative agreement a done deal.
On Friday April 3, the ILWU issued a statement saying that ILWU Coast Longshore Caucus delegates voted to recommend approval of the tentative contract agreement, covering 20,000 West Coast dockworkers at 29 West Coast ports, between the ILWU and PMA, which was reached on February 20, by the ILWU’s 16-member elected negotiating committee and its 8-member Safety subcommittee.
The ILWU added that each of its 90 delegates to the Coast Longshore Caucus reviewed the proposed agreement last week, with 78 percent of the delegates recommending the proposal to move forward. The next step, it explained, is to mail copies of the agreement to longshore union members, with members set to discuss the proposal at local union meetings, which is to then be followed by a secret ballot membership vote and a final tally set for Friday, May 22.
“This agreement required ten months of negotiations–the longest in recent history,” said ILU President Bob McEllrath in a statement, “but we secured a tentative agreement to maintain good jobs for dockworkers, families and communities from San Diego to Bellingham. Longshore men and women on docks will now have the final and most important say in the process.”
Prior to the February agreement being reached there was a major backlog of cargo at West Coast ports’ docks and warehouses, with vessels still at anchor and the expectations that it would take several weeks to clear out the backlog and return port operations to closer to normal. In the relatively brief time since the tentative agreement was reached, though, West Coast port officials have stated that the backlog has lessened in recent weeks, with things improving overall.
During months of negotiations, when it became clear that negotiations were stalling out or not happening altogether at various parts, many shippers were forced to come up with contingency plans to get their goods into the U.S in a timely and efficient manner and not be held up for an indeterminable period at West Coast ports.
These contingency plans included things like shipping earlier than usual to ensure there is enough inventory on hand, and shifting cargo to East and Gulf coast ports as well as Canada and Mexico, with air cargo as option for last minute orders, which is far more expensive.
Other options experts told LM included increasing the use of non-U.S. West Coast liner service with carriers in an attempt to assure space availability in the event of a disruption by having a preferred existing customer status and exploring source-supply shifting, in those limited instances where that is plausible in the short run, to suppliers where the supply chains that don’t depend on U.S. West Coast ports.
A Long Beach Press-Telegram report observed that since the February 20 agreement was reached, the backlog at the Port of Long Beach and the Port of Los Angeles is not fully resolved, but it is not as severe as it was prior to February 20. A POLA official noted in the report that shippers and port managers may be able to resolve the situation by mid-May.
The report added that as of Friday, April 3, there were 13 ships waiting at anchor outside of POLA and POLB, which is down significantly from the 27 ships at anchor on February 20.
Since the deal has been reached, many West Coast ports, most notably, POLA and POLB, have been keenly focused on taking steps to reduce congestion at the ports, including a cargo “peel off” program at POLA, a gray chassis fleet program at both ports that commenced on March 1, and the formation of a working group between the ports focused on strategies and efforts to increase supply chain efficiency and velocity and get cargo moving more quickly.
Anecdotal reports suggest shippers may leverage the difficulties at West Coast over much of the last year to transition to moving cargo through East Coast ports via the Panama Canal, which is would be more time-consuming and costly.
Ben Hackett, founder of maritime consultancy Hackett Associates, said that should West Coast ports be able to convince shippers that things will be back to normal and that they can safely ship via West Coast ports, it should not be too difficult to keep them as customers, as it costs a lot more to ship via Panama on the all-water route, and myriad logistics distribution facilities are on the West Coast.
POLA Media Relations Manager Philip Sanfield said that while operations are improving at the port, it remains a slow process.
“Things are slow but steady would be a good way to describe it,” he said. “There is a lot of labor working, but there is also a lot of more work to do. Nearly every one of our berths is filled with a ship, and getting full labor on each one at all times is a bit of a challenge because there are so many berths and so many ships and container in the port complex at LA and Long Beach. We are working day and night. The chassis fleet is working well, and we are hearing good things since it went live, but there is probably more tweaking that needs to be done to make that improve things. There is a lot more work that needs to be done in the form of collaboration between the port and its stakeholders to relieve congestion as quickly as possible. We are working on long-term solutions to make sure the LA advantage remains in terms of our competitiveness.”
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