Caucus will determine whether ILWU signs
tentative contract or not
LONG BEACH, California — U.S. West Coast
contract negotiations could go one of two ways when the International
Longshore and Warehouse Union convenes a caucus in San Francisco in the week
beginning Dec. 15.
If the ILWU leadership believes there is
enough substance in what has been negotiated by then, it would seek
authorization to sign a tentative contract that would then have to be
approved in a vote by the rank and file in the ensuing weeks. Conversely, if
the union’s leaders are not comfortable with what they have to present to the
caucus, they would decide to return to the negotiating table with the Pacific
That latter option could be devastating. With
the Christmas holidays at hand, no significant progress in negotiations could
be expected for the rest of the month. Extending the contract negotiations
into 2015 would be extremely costly for shipping lines, terminal operators
and especially the importers and exporters who depend upon the U.S.West Coast gateways.
Cargo interests represented by dozens of trade
organizations have been clamoring for a quick resolution to the contract
negotiations before the talks even began back in May. More recently, those
groups have been calling for federal mediation to expedite an agreement.
Since the government will usually call in a mediator only if the PMA and ILWU
request one, the prospect of prolonged negotiations could force the hand of
For example, the Agriculture Transportation
Coalition hosted a meeting of Washington farmers and business leaders in
Seattle to call for resolution of a contract and to highlight the economic
impact ILWU slowdowns at the ports of Seattle and Tacoma are having on the
state’s businesses and workers.
“Our 100-plus hourly workers are seeing up to
a 40-percent reduction in hours from earlier this year,” said Blaine Calaway, vice president of sales, China, at Calaway Trading. “Calculating overtime, that means it
could be upwards of a $150 loss a week per person,” he said.
Longshoremen up and down the West Coast,
however, are not suffering due to the ILWU work slowdowns the PMA says have
been underway at all of the major gateways since late October.
Man-hours paid to longshoremen in November
were 26 percent higher than during November 2013, according to numbers posted
on the PMA website for Los Angeles-Long Beach, which handles about 70 percent
of the container volume that moves through the West Coast. However, total
container volume year-to-date through the nation’s busiest port complex was
up only 4 percent compared to last year, according to the PMA.
ILWU has its calendar and its slowdowns — all of which have created worsening
economic conditions for people who make a living off cargo moving through the
West Coast ports. In recent weeks, the ILWU has not demonstrated any urgency
in reaching a fair and balanced agreement any time soon,” the PMA said.
Trade organizations representing importers,
exporters and other businesses that make their livings through port
activities say the ILWU has no sense of urgency to reach a contract
settlement because longshoremen are profiting from the port congestion that
they are in part responsible for. When a new contract is reached, if past is
precedent, the wage increase in the new contract will be paid retroactively
from the July 1 expiration of the old contract.
Shipping lines are incurring millions of
dollars of losses due to port congestion and ILWU work slowdowns because
their vessels are being thrown off schedule and are forced to wait at anchor
for berths. A Port of Tacoma spokeswoman said international containerships
are experiencing delays of 12-15 days upon reaching port.
The Marine Exchange of Southern California
reported Wednesday morning that five containerships were waiting at anchor
outside the ports. That was up from three container vessels at anchor on
The question that cargo interests are anxious
to have answered is what outstanding issues remain after seven months of
contract negotiations? The one point that the PMA and ILWU seem to have
agreed upon is not to discuss the contents of the contract talks outside of
the negotiations, so that question cannot be answered at this time. The PMA
and ILWU in late August issued a joint press release stating that a tentative
agreement had been reached on medical benefits. That was assumed to be one of
the most controversial contract issues entering into the negotiations.
Terminal operators cannot continue
indefinitely to pay 26 percent more in labor costs each week than they did in
2013 for handling only a 4 percent increase in cargo. Shippers of perishable
agricultural products are suffering even more. AgTC
members in the Pacific Northwest report that the port slowdowns have “left
produce rotting and crippled their ability to fulfill contracts. They also
told stories of having to lay off employees while reducing the hours of
others right as the holiday season approaches,” AgTC
stated in a press release Wednesday.
“These individuals are worried about how to keep
food on the table and buy Christmas presents,” Calaway
The ILWU caucus is set to begin on Dec. 15 and
could last up to a week, if necessary. Once a tentative agreement is reached,
it could take several weeks to complete the voting process at the local
Journal of Commerce
Our regulatory experts are monitoring the situation and keeping a
close eye on labor negotiations, which began on May 12, 2014. In the meantime
we are checking shipment status on a daily/hourly basis to see where our
client’s cargo stands in movement towards its final destination. While we
can’t control the situation we can keep you informed.
contained in this newsletter has been compiled from various industry
newsletters and other public sources. While we use reasonable efforts to
furnish accurate and up-to-date information Page & Jones, Inc. is not
liable or responsible for the accuracy or reliability of any information