Port Negotiations Near Closure
Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) reached a tentative agreement in a late-night session on Nov. 23, which includes concessions for such technological improvements as bar-coding, which would allow for automated tracking and receiving.
Between 400 and 600 marine clerk positions are expected to be eliminated with the implementation of the new bar-coding technology. However, the agreement calls for lifetime employment for the 1,600 registered marine clerks.
Shipping companies, represented by the PMA, agreed to a 50 percent increase in pensions, raising the maximum annual benefit to $63,000. And wages, which currently start at approximately $27 per hour, will be raised by $3 per hour over the next three years.
The deal still needs to be ratified by union members, but if approved, the agreement puts an end to the negotiations that began in midsummer. The two sides debated over a number of issues—including pensions, wages and new technologies—in the weeks before and the months after the ILWU’s contract expired on July 1. In late September, talks broke down and the 29 West Coast ports were shutdown for nearly two weeks, during which time cargo began piling up at the ports and importers began scrambling to find alternate routes for shipping merchandise. In October, U.S. President George W. Bush stepped in to reopen the ports under the Taft-Hartley Act, which imposes an 80-day “cooling off” period. The current agreement was reached one month before the expiration of the “cooling off” period.
The long lines are gone at the West Coast ports and turn times have returned to normal, according to port officials. But some industry watchers say the return to normal turn times is, in part, due to fewer ships arriving. Typically, Southern California ports in San Pedro and Long Beach receive about eight container ships each day. Currently, about three arrive each day in the two ports.
Still, industry analysts peg the cost of the disruption at the ports in the billions.
The Los Angeles County Economic Development Corporation (LAEDC) placed the total costs of the port closure and delays in Southern California at $6.28 billion, or about two-thirds of the typical total trade value for the ports.
And LAEDC officials are warning of further port-related problems in the future, even with the implementation of labor-saving technology. The ports may see improved productivity as a result of the new technologies, but that could lead to congestion further in the pipeline, as trade corridors and trade routes to other parts of the country are stretched beyond their current capacity, said Wally Baker, senior vice president of economic and public policy for the LAEDC.
The ILWU’s oversight committee is scheduled to review the agreement by December 9. —Darryl James
