California Apparel News

With political and economic change in the wind, longshore workers have agreed to vote on a three-year extension of their current contract, expiring July 1, 2019.

On April 28, after 90 International Longshore and Warehouse Union delegates representing 29 West Coast ports met in San Francisco to discuss several contract issues, the caucus recommended that ILWU members vote on whether to extend the five-year contract.

Sources said it is expected to take several months for the approximately 10,000 full-time ILWU members who work at ports from San Diego to Bellingham, Wash., to discuss and vote on the issue.

“The rank-and-file members will make the best decision when they have the facts and an opportunity to decide for themselves, and that’s how this will be decided,” said ILWU International President Robert McEllrath in a statement. “The rank-and-file membership always has the final say on any contract—including this non-precedent-setting proposed extension.”

Extending the labor contract was a topic that has been bandied about since the beginning of 2016 and comes after West Coast ports were crippled with a labor slowdown and a chassis shortage during the 2015/2016 holiday season. The paralysis at the ports led to importers, manufacturers and retailers losing millions of dollars in sales during the crucial holiday season, which accounts for 20 percent to 30 percent of retailers’ annual sales.

The Pacific Maritime Association, which represents the port terminal operators and shipping lines that hire the longshore workers, said that it proposed talks on a contract extension to provide stability on the West Coast waterfront.

“This is an extremely fair and reasonable proposal that demonstrates our commitments to longshoremen, their families and their futures,” said PMA spokesman Wade Gates. “Extending our contract would maintain stability on the waterfront for the next five years—a crucial time as the West Coast waterfront faces increased competition from other North American ports and as the maritime industry continues to battle global economic challenges.”

Under the extended contract, workers would see a 3.1 percent-per-year wage increase from 2019 to 2022, taking their base rate of pay from $42.18 an hour to $46.23 by 2022.

Longshore workers would be eligible to retire early during the three-year contract extension. Instead of a minimum retirement age of 62, they could retire at 59.5 without an early-retirement discount. Workers would be eligible to retire after 13 years of employment.

No change would be made to the ILWU’s topnotch health plan, meaning workers don’t pay monthly premiums, only make a $1 co-pay for prescriptions and have limited deductibles. Employers would also make additional contributions to workers’ pension plans.

West Coast ports and longshore workers are following in the footsteps of similar actions taken by East Coast and Gulf Coast ports and the International Longshoremen’s Association to extend their labor contract, scheduled to expire Sept. 30, 2018.

A possible contract extension for West Coast ports was good news for importers who rely on a stable port environment to get their goods unloaded and shipped to stores. “We are really excited and hopeful that this comes to fruition,” said Mark Hirzel, past president of the Los Angeles Customs Brokers & Freight Forwarders Association. “The hardest thing for all our customers is uncertainty.”

He noted that uncertainty brings added cost to the supply chain. “You have to set up alternative routes that are not the most cost efficient if problems occur on the West Coast. You can’t put all your eggs in one basket. So you may have basket A that is going 80 miles per hour and basket B that is going 70 miles per hour. But you can’t put everything in the same basket going 100 miles per hour.”