California Apparel News

Nine months of contract negotiations between West Coast longshore workers and their employers have produced a small amount of progress and a big dose of frustration.

Port terminal operators and shipping lines said they would suspend holiday operations on Feb. 12, Lincoln's Birthday and Feb. 16, President's Day, as well as the weekend of Feb. 14-15. Yard, rail and gate operations will continue at terminal operators' discretion in light of ongoing slowdowns up and down the West Coast.

The terminal operators said holidays and weekends require an extra 50 percent boost in hourly wages and is not worth it given the work slowdowns that are being exerienced.

This is the second time this action has been taken since Jim McKenna, chief executive officer of the Pacific Maritime Association, which employs the longshore workers, got so frustrated he called a press conference saying the ports could shut down if the two sides don’t come to some kind of agreement soon. He wouldn’t exactly call it a lockout but said a clogged system will bring activity to a stop.

He did the unusual thing of laying out on the table exactly what kind of offer the PMA, made up of shipping lines and port terminal operators, is making to the members of the International Longshore and Warehouse Union.

He said the PMA proposed to raise wages by 3 percent a year. Currently, full-time workers earn $147,000 a year. The PMA’s offer would raise the base rate of pay from $35.68 an hour to $40.68 an hour after five years. The PMA also offered to increase the maximum pension from nearly $80,000 a year to $88,000 a year.

The healthcare and chassis part of the contract has already been ironed out, he said, giving workers a generous healthcare program in which they make no monthly contributions, don’t pay for in-network doctors’ visits and pay only $1 for prescriptions. The value of the healthcare coverage is $35,000 a year per employee.

The ILWU would continue to repair the chassis at the terminals.

But the ILWU still hasn’t agreed to a new contract. “It is time to conclude these negotiations and get our ports working again,” McKenna said in a telephone press conference listened to by dozens of reporters.

He emphasized that work slowdowns beginning in late October and early November by the union have resulted in a 40 percent to 60 percent drop in West Coast port activity and have made the cargo situation impossible. As of Feb. 4, there were 20 cargo-container vessels anchored beyond the breakwater that protects the Port of Long Beach and the Port of Los Angeles.

“Ultimately, this will grind itself to a stop,” McKenna said, noting this could happen in five to 10 days. He said if cargo stopped moving, the PMA would not hire any longshore workers and in effect would cause a lockout.

In response, the ILWU pledged to keep the ports open and keep cargo flowing, despite what the union calls a “massive, employer-caused congestion crisis that has delayed shipping for most of 2014.”

The PMA maintains that the union stopped sending qualified crane operators to move cargo containers at the various West Coast ports including Seattle/Tacoma, Oakland, Los Angeles and Long Beach.

The result is containers are taking longer to get off ships. In Oakland, there were 32.1 container moves per hour in October. But by January, that had declined to 24.4 container moves, the PMA said.

“There was no congestion in the Pacific Northwest as of Oct. 31,” McKenna said. But he said when the slowdowns started, cargo activity declined by 50 percent. “The apple shippers are not able to get their fruit to the market.”

Apparel importers have been devastated by the slowdown at the ports. Right before the holiday season, many clothing importers saw stores canceling their orders because merchandise was arriving late. It was taking as long as two weeks to a month to get goods off the docks, and the situation has only gotten worse.

The last time there was a lockout was in 2002, when a long-and-drawn-out contract negotiation grew acrimonious. The lockout, which started at the end of September during peak shipping season and lasted 11 days, was disastrous for the economy, costing up to $1 billion a day in lost wages and revenues.

Eventually, President George W. Bush had to invoke the Taft-Hartley Act and get a court order to open the ports.

McKenna said the two sides continue to meet at the bargaining table in San Francisco with a federal mediator. He said they need to get about five to seven issues resolved, which include the wage and pension portion of the contract. The new contract would be for five years and replace the previous six-year contract, which expired on July 1. The contract covers nearly 20,000 workers at 29 West Coast ports.

“The last thing we want to do after nine months,” McKenna said, “is close this place down.”

ILWU President Robert McEllrath said the two sides are very close to reaching an agreement.